Many crude drugs are moving up due to seasonal shortages, so traders are turning to new sources in Israel and Latin America.

* Orange peel - A trader said he is sold out of Spanish sweet orange peel, which has moved up to $1.80 a pound from $1.70 a pound in February on the spot market. He is importing a container loaded with 40,000 pounds of Israeli Jaffa orange peel.The trader said, The Israel peel is a lot cheaper at $1.00 a pound so I hope to sell more orange peel. The Israelis dry their peel in dryers which gives it a stronger color but less flavor than the Spanish peel which is air- dried in sheds.

Orange peel is used in herb teas and potpourris. Poultry farmers add orange peel to chicken food as it makes the egg yolks bright yellow.

* Egyptian chamomile - Egyptian chamomile flowers are in short supply but the situation will improve after mid March when a new crop is harvested.

The current price is $2.70 a pound. A trader predicted that chamomile prices will drop and the supply will increase after two years because farmers in Southern Mexico are planting acres of chamomile seeds. As chamomile is a perennial the flowers will not be ready to pick until 1989.

Chamomile flowers are used in herb teas for their sedative effect and in shampoos for lightening blonde hair.

* Essential oils - In the essential oil market, clove leaf oil prices have dropped drastically from $4.00 to $4.25 a pound for Indonesian oil and $3.67 a pound for oil from Madagascar. The current price is an all-time low of $1.20 a pound.

Indonesian producers are now making eugenol from their clove leaf oil, and selling all this finished product in the United States at low prices. U.S. producers have completely stopped making eugenol.

Some traders are stuck with stocks of clove leaf oil no one wants; they can only manage to sell at a huge loss.

Chewing cloves for a toothache is an age-old folk remedy. Eugenol, derived

from clove leaf oil, is used in dental creams and skin creams as a painkilling ingredient.