1. Product description
6. Trade structure
Resins are complex mixtures of terpenes and terpenoids (or flavonoids) compounds which may contain both volatile or nonvolatile components. They may be solid or semi-liquid, although always water insoluble. If the percentage of volatile component is high, the substance will be more liquid and may be labelled as oleoresin or wood oil. Volatile terpenoids and related compounds occurring with no non-volatile fractions are termed essential (aromatic or volatile) oils.
A variety of oleoresins are extracted from various plants. Among them important ones are pine oleoresin obtained from pine trees, damar oleoresin from Dipterocarpus spp., copal from Agathis dammara and dragon's blood (rattan resin) from rattan palms. Although all the resins mentioned appear in the international market, pine oleoresin being the most important one, will be discussed below.
Pine oleoresins or naval stores
'Naval stores' is the inclusive term
used to denote pine oleoresins and their derivatives. Over centuries pine resin and pitch
were so useful to the sailing ships of the navies of the world that even today the most
commonly used term for pine oleoresin products is 'naval stores'. The term is now a
misnomer, as only a small fraction of the products derived from the oleoresins is used for
these purposes; nevertheless, it is still widely used in trade to denote these products
(Greenhalgh, 1982). The crude oleoresin is processed to yield turpentine, an essential oil
and non-volatile rosin, among other products.
The following are the main oleoresin yielding pine species:
United States of America
Pinus palustris, P. elliottii
France, Italy, Portugal and Spain
Greece and Spain
P. massoniana, P. tabuliformis
P. caribaea, P. oocarpa
There are three distinct sources of naval stores. Gum naval stores are traditionally obtained by wounding or tapping the resin ducts in the xylem vessels of living pine trees with a sharp axe or a shaving tool. This is the oldest method of extracting pine oleoresin. It has only recently been replaced with more effective tapping techniques of stimulation of the tree wound by applying acid pastes, and the development of new bark 'chipping' methods that do not wound the xylem (Darrow, 1983).
Wood naval stores are derived from the resinous wood of old stumps either through destructive distillation ('tar burning') or through the extraction of pine resin from finely chipped stumpwood with steam or organic solvents.
Sulphate naval stores
obtained as a by-product of chemical pulping (kraft) of pine wood. Sulphate turpentine is
condensed from the cooking vapours, while crude tall oil (CTO) is obtained from the
alkaline liquors, and is latter fractioned into various products, including tall oil
rosins (TOR) and tall oil fatty acids.
Turpentine and rosin are two
constituent parts of the pine oleoresins. One tonne of gum oleoresin provides about 700 kg
of rosin and between 100 and 200 litres (about 87 to 174 kg) of turpentine. For many years
they were used in unprocessed form in the soap, paper and varnish industries. Today, most
rosin is used in various modified forms in a wide range of products, including paper size,
adhesives, printing inks, rubber compounds and surface coatings. The composition of
turpentine varies considerably according to the species of pine exploited. Turpentine and
its constituents, particularly alpha-pinene and beta-pinene are widely used in chemical
industry, particularly fragrance, flavour, vitamin, insecticides and polyterpene resin
manufacture (Copper et al, 1984). More and more specialised uses are being found for pine
resin products, particularly those of high quality. Turpentine derived from pine resin is
also used as a source of aroma chemicals in flavour and fragrance industry.
World oleoresin production from all the three sources, has almost remained stable between 1.1 and 1.2 million tonnes over the past 20 years (En, 1987). Mukerji (1989) also estimated current world production around 1.2 million tonnes. The production is, therefore, quite stable, but there has been shifts in the supply structure the production base.
The production of gum naval stores is very labour intensive, constituting between 50 to 80 percent of production costs. Rising labour costs and reduced labour availability have brought about a substantial decrease in supplies of gum naval stores from major producers, such as the USA, France, Spain, Greece and Mexico.
At present China and Portugal dominate the world's production of oleoresin. China has emerged as the world's largest producer of rosin, with annual production level of 200,000 to 250,000 tonnes (Copper et al, 1984). More recent estimates of annual output of rosin and turpentine from China are to the tune of 400,000 tonnes and 46,000 tonnes, respectively (Kunshan, 1991)
Portugal, produces about 90,000 tonnes of gum rosin annually. Other producers include the USA, Spain, Mexico, France, India, Malaysia, Russia, Poland and Honduras. The USA and Russia produce mainly TOR and wood rosin for domestic consumption.
The share of the three sources has also been changing considerably, with tall oil rosin gaining ground in the developed countries like USA, Finland and Sweden. Although tall oil rosin accounts for an increasing proportion, the share of gum rosin in international trade is about 65%. Tall oil rosin and wood rosin contribute about 29% and 6%, respectively, to the world total production of oleoresin.
Naval store industry is rapidly developing in some of the third world countries. Brazil, for example has moved from being a net importer of naval stores to a net exporter, and in 1989, it produced about 51,000 tonnes from 42 million trees (Copper, 1991). Indonesia has also recently emerged as a major producer and supplier of rosin and turpentine to the world. Current estimates of its production are more than 100,000 tonnes of pine oleoresin.
Annual turpentine production is
around 270,000 tonnes (Mukerji, 1989). Earlier estimates were around 250,000 tonnes
(Coppen et al, 1984).
No oleoresin enters the export market, because it is all processed in the country of production. Most naval stores production is consumed in the countries of origin, and only about one-third of all rosin produced enters world trade.
The world's total annual import/export of rosin is around 330,000 tonnes (Mukerji, 1989). In the late 1970s annual average world trade was estimated at 350,000 tonnes (Greenhalgh, 1982). Both these estimates confirm a stable gum rosin trade. Portugal and China with total annual exports of around 200,000 tonnes, dominate the gum rosin trade, while minor suppliers include Honduras, Mexico and USA.
China accounts for about one-third of total world production and exports. About 90 percent of its production is gum rosin (Zhixin, 1987). Annual export of rosin from China is about 200,000 tonnes, accounting for 40 to 50 percent of the world's total trade in rosin (Kunshan, 1991). In view of extensive pine plantations and cheap labour force, China is expected to maintain its dominance in world's trade of rosin.
Former USSR ranked second in world production of oleoresin, the bulk of its production originating from tall oil rosin. Authentic information on trade and production of Russian oleoresins is, however, not available. Mukerji (1989) estimated gum rosin production in USSR ranging between 200,000 to 250,000 tonnes from 1986 to 1988.
Portugal retained third position in production of gum oleoresin for quite some time, but its production is declining, primarily because of non-availability of labour, and its position is expected to be taken over very soon either by Indonesia or Brazil. Other exporting countries are Sweden (only CTO or TOR), Nicaragua (wood rosin) and Finland (turpentine, TOR and tall oil).
The list of countries importing
naval store products is quite long - well over 100. Japan, Germany, UK, France, the
Netherlands, Italy, Belgium/Luxembourg, Australia, Austria, Canada, Colombia, Switzerland,
South Africa, Zaire and Nigeria being the major importers. Japan is the largest importer
of naval stores. About 50 percent of the total exports of gum rosin from China enter
Japanese markets. Quantum of annual imports of gum rosin by USA is in the range of 13,702
to 16,783 (1989 to 1991).
Trading structure, procedures and tariffs have been discussed at length by Greenhalgh (1982). Chinese exports are centrally controlled through the China Forest Chemicals Imports and Exports Corporation - a subsidiary of China National Native Produce and Animal By-products Import and Export Corporation. Most transactions take place at the twice-yearly trade fairs, especially the Canton Fair, where deliveries and prices are negotiated.
Portuguese gum oleoresin trade is in the hands of private processors, who purchase it through middlemen, process it in their plants and export it, mostly on the basis of forward contracts of 3 to 6 months.
Indonesian oleoresin production,
processing and rosin trade is both in public (Perm Perhutani) as well as private sectors.
However, the Indonesian Institute of Standards (IIS) has not yet fixed any standards for
rosin and turpentine. Perm Perhutani has adapted its own standards and Gardener Colour
Scale,. This has proved useful in promoting exports (Mukerji, 1989).
Factors influencing gum rosin prices
have been discussed by Greenhalgh (1982). China remains a dominant force in setting price
trends. In the absence of information on price of Chinese exports, however, FOB prices of
Indonesian gum rosin are indicated, which ranged form US$ 364.50 in 1984 to US$, 402.32
per tonne in 1991 an average increase of 10.4 percent. Price (fas) of gum rosin imported
by the USA during 1991 was $ 569.49 per tonne.
8.1. Competition with petroleum resins
As stated earlier, future production will depend on availability of cheap labour. State of development of the gum naval store industry tends to be inversely related to the level of economic development in the country at the time; thus the higher the GNP, the smaller the naval store industry (Greenhalgh, 1982).
Availability of suitable coniferous forests will affect production levels, but so far this has not been a major constraint. New pine plantations are emerging, whereas extensive pine plantations of suitable species are lying untapped in countries like South Africa, where large unskilled and unemployed rural labour can be utilised in resin tapping operations. Integration of resin tapping with pine plantation programmes can substantially reduce the afforestation and maintenance costs. As a matter of fact early returns from resin tapping can make pine plantations economically more viable and attractive.
Thus, the present prospects for new
producers of rosin and turpentine are favourable, and in particular there are good
prospects for new producers of gum naval stores in developing countries, since production
is labour intensive. Gum rosin has shown a sharp decline in the developed countries. On
the other hand, because of its labour intensive technology, and large scale pine
plantations raised in some countries, rosin gum production has grown rapidly in countries
like China, Brazil, Argentina, Mexico and Indonesia (Mukerji, 1989).
In some end-uses petroleum resins have gained dominance over natural rosin in some countries, especially in Japan, but in some chemical properties the latter has maintained superiority over synthetics. Such petroleum resins are, however, difficult to synthesize and are, therefore, costly. Moreover, rapid price rise in petroleum feedstock has made petroleum rosins less competitive and such research is, therefore, being discouraged. Thus, if adequate supply and fairly stable prices can be ensured, future of natural rosin is safe, and there will be no rapid expansion of petroleum rosins into new fields.