As a successful harvesting season yielding several hundred tonnes of lavender oil wraps up in Bulgaria -- the world's top producer -- the industry's future looks more grey than purple.
With a global production glut already weighing on prices, Bulgarian distillers now fear new EU regulations will further crimp business.
While the European Union has offered to pause the implementation of the bloc's revised regulations restricting harmful chemical substances, the clock is ticking.
Nikolay Nenkov, head of Galen-N distillery -- one of the biggest in Bulgaria -- is worried that he will soon have to affix health warning labels featuring off-putting slogans to his vials of lavender oil.
"We fear that such measures will lower consumption, curb production and (thus) the sector might disappear in some regions, which is very bad considering it's a long-standing tradition," he told AFP.
In an industry already reeling from low prices, labour shortages, climate change and pests, the planned revisions would "create further tension", he added.
- 'Big step forward' -
From the famous lavender fields surrounding Zelenikovo in central Bulgaria to France's Provence, producers and farmers have teamed up to defend their product against what they see as unfair laws from Brussels.
Other major producers include China, Moldova and Greece.
Across the EU, essential oils are regulated by two main chemical laws known as REACH and CLP.
The upcoming revision of both laws seeks to provide consumers and companies with better information about the possible existence of endocrine disruptors and components that cause cancer or allergic reactions in products.
The review of REACH -- which deals with the registration, evaluation, authorisation and restriction of chemicals -- has been postponed until the fourth quarter of 2023.
But the EU Commission's proposal to clarify the classification and labelling of substances under the CLP, particularly for online sales, is due to be put to a plenary vote in October.
Faced with the producers' resistance, the EU Council has proposed a four-year exemption from the entry into force of the text.
"The problem has not been solved, but this postponement is a big step forward," said Nenkov.
- Overproduction -
In a bid to allay the concerns of major European producers, Brussels has stressed that it "has no plans to start requiring an analysis of each molecule in essential oils" or "to ban" them, a spokesperson told AFP.
"Essential oils are already defined as chemical substances".
At Nenkov's distillery, 70-year-old technician Vasil Andreev insists that he is handling a "fully natural product" as he filters another bucket of the pale yellow oil.
It takes up to 120 kilos of lavender -- still being pressed by foot into huge troughs before distillation -- to produce one kilo of Bulgaria's purple gold used in famous cosmetics and perfumes.
But booming production has oversaturated the market in recent years, causing prices and profits to plummet. Prices currently hover below the costs of production at around 20-35 euros per kilo, after peaking at 140 euros in 2018.
"For the past three years, there has been global overproduction of lavender oil, with supply outstripping demand, causing more and more farmers to give up the crop," said InteliAgro think tank analyst Nikolay Valkanov.
Farmers acknowledge that they will sooner or later have to destroy so
me of their fragrant fields to be able to return to prices that allow them to stop selling at a loss.
Artificial Intelligence Analysis
Defense Industry Analyst: 8Stock Market Analyst: 6General Industry Analyst: 7Analyst Summary
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This article examines the potential implications of the European Unions (EU) proposed revisions to the REACH and CLP laws on the global lavender oil industry. Bulgaria is the worlds top producer of lavender oil and is particularly concerned about the possible effects of the revisions, including health warning labels featuring off-putting slogans and decreased production, which could lead to the sectors disappearance in some regions. Bulgarian producers and farmers have teamed up to challenge the EUs regulations, arguing that essential oils are already regulated by national laws. The review of REACH has been postponed until the fourth quarter of 2023, but the industry is already feeling the effects of the proposed changes.
The article has great relevance for defense industry analysts, as it provides insight into the potential effects of EU regulations on the global lavender oil industry. It also provides valuable insights into the challenges facing the industry, including labor shortages, climate change, and pests. For stock market analysts, the article provides a glimpse into the potential implications of the revised regulations for the industry, including decreased production, which could have a significant impact on the global lavender oil market. Finally, general industry analysts will find the articles analysis of the potential effects of the EUs proposed revisions to the REACH and CLP laws on the industry valuable.
Over the past 25 years, there have been significant developments in the space and defense industry, including increased competition due to the globalization of the industry, and technological advancements such as the emergence of new technologies. This article draws parallels between these trends and the proposed EU revisions, as they both have the potential to significantly impact the lavender oil industry.
Investigative
Question:
- 1. What specific revisions to the REACH and CLP laws are proposed by the EU?
- 2. How could the proposed revisions affect the global lavender oil market?
- 3.
What strategies can Bulgarian producers and farmers use to challenge the EUs regulations?4. How will the proposed revisions impact the labor and production costs for the industry?
5. What strategies could the industry employ to combat the potential effects of the revisions?
This AI report is generated by a sophisticated prompt to a ChatGPT API. Our editors clean text for presentation, but preserve AI thought for our collective observation. Please comment and ask questions about AI use by Spacedaily. We appreciate your support and contribution to better trade news.
