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Some rough guidelines to possible markets are given in this chapter. These are based mainly on precedents with other vegetable oils, and it should be emphasized once again that jojoba oil is unique, and when substantial quantities become available in consistent supply and at moderate prices, many new uses are likely to be discovered.
Jojoba oil remains stable during transport, and therefore, the world is its potential marketplace. Already, Japan is its largest user and has been importing a third of U.S. production in recent years, the equivalent of about 100 tons per year. In addition, West Germany and the Netherlands have together been importing a like amount.
Most of this has gone into specialty cosmetics. However, it seems clear that in the next 10 years far more oil than the cosmetics market can absorb will be produced. This means that jojoba marketers have to quickly develop new outlets. At first, these will probably be markets that already use other oils and waxes. For jojoba-based materials to penetrate such markets, they must be either cheaper or better than the present products. If there is no significant advantage in price or performance, manufacturers will refuse to bother with the expense and disruption of reformulating their products.
Sperm Oil Replacement
Sperm oil, obtained from the blubber and the head cavity of the sperm whale, has two main industrial uses: lubricant additives and leather-softening agents. Annual world production was approximately 150,000 tons in the mid 1960s and about 55,000 tons in 1977. It is even less today, not because of any inferiority in material, but because several countries have banned its importation. The United States, formerly the world's major consumer of sperm oil, prohibited its importation in 1971 as part of an endangered species conservation policy. Later, other countries adopted similar statutes.
Because of the growing shortage of sperm oil, various industries are looking for substitutes. Lubricant manufacturers are estimated to have satisfactorily replaced 80-90 percent of the sperm oil they originally used. The leather industry apparently has been unable to find suitable replacements. Some synthetic oils have been developed for use in leather, but none appears to match the qualities of sulfonated sperm oil. Sulfonated jojoba oil should be a good replacement.
The future relationship between
price and market size is unknown' but as prices fall, jojoba oil's potential
markets will get much bigger.
As long as jojoba oil is unavailable in quantity and at
moderate prices, both the leather and lubricant industries are expected to
continue with other substitutes.
At present, the remaining stocks of refined sperm oil are traded at prices up to $3,000 per ton. At such a price, the potential demand for jojoba oil, just for use in lubricants, has been estimated at 20,00050,000 tons per year.(Information from W. P. Miller)
Pharmaceuticals
The world market for pharmaceutical products is large. In 1979, it amounted to about $65 billion. In recent years, the real annual growth has increased at a rate of about 7 percent, and this pace is expected to continue, primarily because of the developing countries' ever-growing demand for pharmaceutical products.
Generally speaking, pharmaceuticals are expensive on a per-kilogram or per-ton basis. As a result, this sector is in a better position than any other to pay for low-production, high-quality ingredients such as today's jojoba oil, which is too costly for larger and cheaper markets.
If the plantations already
established live up to even modest expectations, the amount of jojoba oil
available in future years will be substantial. This stylized graph shows one
possible scenario. Floods, frosts, and other adversities can be expected to
interrupt the smoothness of the curve. Unexpectedly low yields may shift the
curve to the right so that the indicated yields are achieved in later years.
Overall, however, the trend should be like that shown. The anticipated 1992
production is about the same as the amount of sperm oil that the United States
was importing in the early 1970s. (Information from C. Whittaker)
As already mentioned, the oil's physical and chemical properties constitute a good basis for its prospective use as an antifoam agent in manufacture of antibiotics. As an indication of the size of this highly specialized market, the U.S. production of just one antibiotic, penicillin, in theory could absorb 8,000 tons (7 million kg) of jojoba oil annually. However, so far, the oil has been used only experimentally as an antifoam agent in penicillin production.
Although jojoba's potential for direct use in pharmaceuticals is currently being investigated (notably in formulations of ointments and creams for skin injuries and disorders), any newly developed products will have to pass public health tests before being introduced to the public. Clearly, it will take some years for jojoba oil to be used directly in pharmaceuticals on any significant scale.
Cosmetics
As mentioned previously, jojoba is already being used in various cosmetic products, but, in terms of world use, still on a small scale. Currently, it is largely small manufacturers that buy it for hair and skin preparations.
The greatly expanded use of jojoba oil in cosmetics seems to depend mainly on stable supplies and lower prices. It should increase significantly when supplies increase and prices drop as more plantations come into production.
The overall cosmetic industry has expanded steadily in recent years. The international trade in cosmetics increased at an annual real rate of about 13 percent between 1974 and 1978, reaching a total value of about $1.7 billion. Although the world market is relatively large, only part of it - hair and skin preparations, face makeup, and lipsticks - is relevant for jojoba oil and wax.
The general trend towards natural cosmetic products is noticeable in the industry, and this should benefit jojoba. Not surprisingly, most of the jojoba oil used at present is in cosmetics advertised as being "natural".
As its fundamental properties of stability and quality become more apparent, and its price drops with increasing production, jojoba oil could perhaps achieve sales to the cosmetics industry of between 10,000 and 12,000 tons per year.(Information from W. P. Miller)
Waxes
If minor waxes such as spermaceti and ouricuri are included, the total international trade in animal and vegetable waxes is about 20,000 tons per year. The different types sell at average prices ranging between $3,000 and $6,500 per ton. This is expected to remain more or less stable, partly because of the increasing competition of synthetic waxes.
Once jojoba wax is available in commercial quantities on a regular basis, it may be able to seize a sizable part of the wax market, but only if it can be produced at prices comparable to those of waxes such as beeswax, carnauba, and candelilla. Some of the possibilities are described below.
Beeswax Replacement. Most countries of the world produce their own beeswax, primarily by local beekeeping industries. The amount traded internationally is relatively static. Between 1972 and 1976, 5,000-5,500 tons were traded internationally each year. Ninety percent was absorbed by the United States, Japan, West Germany, the United Kingdom, France, the Netherlands, and Switzerland.
Beeswax is used in cosmetics (such as skin creams, emulsions, makeup foundations, face powders, rouge, hair creams, and lipsticks), food (candies), pharmaceuticals (ointments, coatings on pills), and candles.
Although quantities remained steady, prices for beeswax have risen over the years. Between 1973 and 1980, the international prices rose at an average annual rate of about 10 percent in real terms. Prices normally fluctuate in the range of $5,500 to $6,500 per ton.
On its technical merits, jojoba wax seems to be a suitable substitute for beeswax in many uses.
Carnauba Wax Replacement. Carnauba wax has many possible applications, but it is primarily used for carbon paper, floor polishes, car polishes, and cosmetics. Brazil is the only country that produces significant amounts. Its exports range from 10,000 to 14,000 tons annually. Prices range between $2,000 and $4,000 per ton, depending on quality. Jojoba wax seems a suitable replacement for carnauba in most applications. If its price drops to a point where it can compare with carnauba's, it is likely to capture some markets. This is primarily because carnauba is picked by hand and its prices are likely to rise quickly. Also, its supplies are under political control and could be subject to deliberate manipulation.
Candelilla Wax Replacement. Candelilla wax is used mainly in the manufacture of chewing gum, polishes, and cosmetics. Mexico, the only significant producer, increased its exports from about 2,000 tons in 1972 to about 2,500 tons in 1976. Prices ranged between $2,900 and $3,800 per ton, depending on quality.
Again, jojoba wax is a likely substitute. Its melting point is slightly higher and, because it is a cultivated rather than a wild plant, its supplies could be more stable and its prices more steady, thereby giving it the competitive edge.
The eventual possible demand for jojoba wax in all these uses is on the order of 5,000 to 10,000 tons per year, if its price is competitive.
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