With the tightening supplies the lavender oil prices experienced a gradual incline in prices during the first half of 2025. A major crop decline in the previous year, estimated at 25%, led to a notable supply deficit as existing stocks were nearly depleted. While the state of Uttar Pradesh maintained relatively stable production levels in 2024, the limited carryover stock was insufficient to alleviate the emerging shortfall.
The combination of reduced availability and steady industrial demand exerted upward pressure on prices. In the Pacific Northwest, lavender acreage continued to decline, with an approximate 8% reduction compared to the previous growing season. Additionally, erratic climatic conditions in key growing regions adversely affected both the yield and the quality of the oil. A significant portion of the oil available during this period was reported to be of lower quality, making high-grade lavender oil increasingly scarce.
Internationally, alternative producing regions faced similar constraints, which contributed to a decline in the availability of quality supplies and a corresponding firming of prices. As the market adjusted to these supply-side challenges, buyers were observed securing their requirements in advance to safeguard against potential shortages. Establishing reliable relationships with growers in critical areas particularly the Pacific Northwest proved essential in managing limited supply and ensuring a consistent flow of quality oil.