State and Prospects of Essential Oils Production in Ukraine and the World

Abstract

The study aimed to determine the economic efficiency of production and export potential of essential oil crops in Ukraine. To achieve this goal, a detailed analysis of the cultivation areas of the leading essential oil crops, such as narrow-leaved lavender, lavandin, peppermint, clary sage, hyssop, lemon balm and catnip, was conducted. The analysis examined trends in major markets, including Europe, North America, and Asia, and used this data to evaluate the competitive advantages and disadvantages of Ukrainian essential oil producers compared to those from other countries. The study found that Ukraine possesses significant potential for essential oil crop production, thanks to its favourable agricultural and climatic conditions. However, this potential is currently constrained by several major challenges, including underdeveloped processing infrastructure, a lack of innovative technologies, and reduced logistics efficiency. The study results showed that the greatest potential in Ukraine is in the cultivation of lavender and peppermint, which are important raw materials to produce essential oils. An assessment of the economic efficiency of growing these crops showed that intensification of production, modernisation of technological processes and infrastructure development could significantly improve the productivity and competitiveness of Ukrainian producers. The analysis of global market dynamics, which revealed the need to adapt to global economic trends, changes in demand and the development of innovations in processing technologies, was emphasised. The study concluded that Ukraine needs to expand investment projects, enhance raw material processing technologies, and lower the costs of transporting and storing products. The assessment of export potential identified the most promising areas for Ukrainian producers to enter international markets, in particular the markets of Europe and North America, where demand for natural essential oils continues to grow.