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Suresh P. Iyengar

Mumbai, Dec. 21 Mentha oil prices may continue to rise on the back of domestic demand from FMCG and pharmacy industries. Spot prices in the Chandausi market have risen from Rs 518 a kg to Rs 625 in last one week due to lack of enough supply in the market.

Strong export demand from the US, Japan, UK, Canada, Malaysia and other European countries may also keep the prices on the higher side.

“Currently sowing activities lacklustre, but are expected to gain momentum in January and fresh crops will arrival in June-July,” said Mr Harish G., Head of Research, Karvy Commodities.

In 2007-08, total domestic production was estimated at 32,000 tonnes, which was lower than 36,000 tonnes recorded the previous year. According to trade estimates total inventory is pegged at about 30-35 per cent of total domestic production.

Mint products export between April and October stood at 11,500 tonnes (13,505 tonnes), according to a Spices Board report. Export prices were higher at Rs 696 a kg (Rs 623). Spices Board has set an export target of 21,000 tonnes in 2008-09.

In the first half of 2008, mentha oil prices largely consolidated between Rs 440 to Rs 550 a kg due to lack of fresh triggers for demand. However, from mid-June, spot prices started moving up and hit a high of Rs 800 a kg, while in futures market, it touched Rs 810.

Report of huge crop damage due to floods in Uttar Pradesh was one of the major factors that pushed up prices to higher level. Production estimates was revised lower to 32,000 tonnes from 42,000 tonnes. However, the firmness in the market was short lived as prices eased to recent lows levels of Rs 454. Slowdown in export demand due to concerns of global recession, sluggish domestic demand and increasing inventories were attributed to the downfall in later half of the year. Prices now have started a fresh rally from the lower levels on emergence of fresh winter demand in the market.

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