Patchouli Oil

Entering January

In 2026, Indonesia's patchouli oil supply chain remains tight, extending constraints from December 2025. Production and supply continue to decline, especially in Sulawesi, the main producing region. Low farm-gate prices earlier in 2025 have reduced replanting, thinning the upstream supply and limiting short-term recovery prospects.

By late December, the market reflected this tightening, with available volumes at origin decreasing and patchouli oil prices rising by about 15% since early December. This is due to reduced farmer selling and increased buyer competition, trends expected to continue into January.

In Sumatra, flooding and landslides disrupt harvesting, transportation, and distillation, affecting its contribution of 10–15% to Indonesia's total output. These disruptions exacerbate local tightness and hinder its ability to counterbalance Sulawesi's seasonal slowdown, making national supply heavily reliant on Sulawesi's developments in January.

Demand is anticipated to remain steady but cautious. Farmers and collectors will likely release stocks selectively to maintain margins after the price increase, while exporters and manufacturers continue consistent purchasing. This careful demand should support prices without causing panic buying or excessive volatility.

For buyers, January 2026 indicates a structurally tightening market. Stock levels at origin are decreasing, and meaningful supply improvement requires time and sustained farm-gate incentives. Securing forward coverage and maintaining strong relationships with supply partners will be crucial to mitigating availability risks and ensuring continuity into early 2026.