Market Dynamics
Russia is an important market for aroma chemicals and has long been a leader in the global production of essential oils and fragrances. With its oil-rich economy, vast resources, and immense potential, Russia has historically been a major supplier of many fragrances and materials used in the manufacture of aroma chemicals. The Russian market for aroma chemicals reflects the diversity of the country's economic activity; production of essential oils and perfumes is mainly driven by the cosmetics and fragrance industry in the Russia as well as by the agricultural industry. The Russia-Eurasia region is a traditional supplier of fragrances, which supply a variety of essential oils and aromatic chemicals that are used in the manufacturing of colognes, perfumes, soaps, detergents, food flavorings, and other products. As Russia is a major producer of essential oils and perfume industry products, it has become an important player in the global aroma chemical market. The strong growth of the perfume industry in Russia has also pushed the demand for new and innovative ingredients, including natural and artificial aroma chemicals. A growing awareness of the importance of aroma chemicals in the global production has resulted in increasing demand in the market.
In terms of production, production of aroma chemicals in Russia increased in 2017, with major contributions from essential oils and agricultural aromatic chemicals. In terms of market outlook, the Russian aroma chemicals market outlook is expected to remain positive in the medium and long-term due to increased industrial activity and higher consumer spending in Russia. Russian imports of aroma chemicals increased in 2017, in line with the positive market outlook. Imports of aroma chemicals from countries like India, China, Brazil, and Ghana grew by an average of 18 percent in 2016 and 2017. The market will likely benefit from the development of new fragrances supported by the local manufacturing industry, as well as from improved production technologies and lower costs of production. Russia is projected to remain a strong player in the global market for aroma chemicals in the foreseeable future, as the country is likely to continue to be a main contributor to the growth of the global perfume and aroma industry. Further research and development efforts in the country are expected to increase the demand for aroma chemicals.
In addition, the Russian government’s efforts to alleviate the costs of producing essential oils and aromatic chemicals are likely to increase the supply of aroma chemicals available in the market in the medium and long-term.
