In order to curb the prices of mentha oil futures, commodity bourses MCX and NCDEX have decided to hike its margin money — the deposit traders are required to maintain with the bourse — to 33-40 per cent from tomorrow.

Currently, MCX has made it mandatory for mentha oil traders to maintain a deposit (margin) worth at least 15 per cent of the value of futures contracts sought to be traded. NCDEX has fixed the margin at 7.62 per cent.

In separate circulars, the two exchanges said that they have decided to revise the margin money in mentha oil contracts upward with effect from April 13 following the direction of the Forward Markets Commission.

After the hike, the total margin money at MCX would stand at 40 per cent, especially for trading in April contracts. For other contracts, it would be 25 per cent.

Similarly at NCDEX, where volumes are not significant, the margin money would increase to 33 per cent for April contracts and 17.62 per cent for other contracts.

“Prices of mentha oil futures have risen by 30 per cent in the last one month. Margins are imposed to check speculative trade and curb price rise,” the Kochi-based commodity brokerage firm JRG Wealth Vice-President and Research Head, Mr Harish Galipelli, said.

Mentha oil futures prices have risen to Rs 1,300 per kg now from Rs 1,000 per kg in one month. Prices have rather increased consistently from Rs 550 per kg in February 2010 to Rs 1,300 per kg now, he noted.

Recently, the regulator FMC had also conducted an enquiry to determine whether speculative trade was contributing to the sudden spike in the prices of mentha oil, sources said.

According to trade estimates, mentha oil production is expected to increase to 38,000 tonnes this year against 28,000 tonnes in 2009-10 season. Mentha is a rabi crop.

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