Mentha reaps rich harvest on export obligation

MUMBAI: Export demand is holding the price of mentha oil despite higher arrivals across various UP mandis. The spot price has moved up to Rs 525 a kg from Rs 500 at Chandausi, a major mentha oil market in UP. In the medium term the price may remain range bound amid a good production and higher recovery rate. Mentha oil is used in industries like pharma, food and perfumery.

Currently 800-1000 drums (one drum=180 kg) are arriving everyday from various mandis, which is double than last year’s while the recovery is 50-60 kg per acre as against 40-50 kg last year. “Demand from exporters who have committed orders has pushed up the price which during this time should have been around Rs 450 a kg,” said Chandausi-based trader Girish Kumar Agrawal.

Having realised a high price in last two years farmers are not settling below Rs 500. In 2005 the mentha oil price touched Rs 850 a kg, but fell to Rs 750 last year. The average price was Rs 600.

RC Gupta, another trader from Chandausi said: The price could increase by another Rs 100 a quintal, but thereafter it will drop. With mentha oil production expected at around 32,000 tonnes as against 25,000 tonnes last year, mentha June futures contracts at MCX closed 1% lower at Rs 499 per kg.

Delhi-based mentha oil trader Sandeep Sabharwal said the price is unlikely to come down. Exporters are covering their entire year demand and building up buffer stocks. “Even in the long run the price will be in the range of Rs 485 to 550,” he said.

According to Spices Board, about 16,250 tonnes of mint products, valued at Rs 1,100.95 crore were exported as against 14,544 tonnes valued at Rs 813.21 crore in 2005-06. The US imported 3,418 tonnes, followed by China and Germany.