In the first half of 2025, citronella oil markets in major producing countries like India and Indonesia witnessed a firming price trend, primarily driven by tightening supply and higher production costs. In India, the cultivated area declined further, reducing output. Rising input and labor expenses challenged farmers, while limited carryover stock from the previous season deepened the supply crunch.

Demand remained steady, particularly from aromatherapy, mosquito repellent, and home-care sectors, sustaining market activity and supporting price movements. Indonesia faced similar pressures. Although key growing areas such as Aceh, Java, Sumatra, and Sulawesi remained active, elevated costs in fieldwork and steam distillation processes weighed on producer margins. While the climate remained favorable, operational expenses hindered expansion. Globally, demand stayed firm, supported by continued use in perfumery, wellness, and cosmetic applications. Buyers, especially in export markets, remained active, drawn by citronella oil’s natural positioning and versatile applications.

With limited export volumes and rising costs in both nations, the market leaned toward tightness. As a result, the first half of 2025 was characterized by a stable but constrained supply environment, shaped by persistent demand and cost-driven production challenges across key producing regions.

Analyst Insight

According to Procurement Resource, citronella oil price curve is likely to fluctuate around similar trajectory in the coming months as well, under the lingering high cost of production and constricting supply.