Mentha Oil Dearer On Exports & Supply Crunch.

Kochi: Mentha oil prices are on the higher side due to good export demand and lower crop. With farmers holding on to the crop, the availability in the market has dwindled. Domestic demand has become sluggish with buyers looking at small volumes and immediate delivery.

“The production is lower than the initial estimate by 16-20%. Actual production of oil would be only 35,000 as against the estimate of 42,000 tonne. Arrivals to the mandi are also on the lower side and declining,” Nalini Rao of Angel Broking said.

Demand is extremely robust, especially from the overseas market, she added. According to the state-run Spices Board, India is one of the world’s largest producers of mentha oil and exports nearly 60-80% of its produce. Spices Board said that the bulk of the export is in the form of crystallized menthol. China is a major importer of the crystallized form.

Exports during the April-July period of the current FY is lower in volume by 8% when compared to the performance of the same period, while value has increased by 53% for the period on higher unit value realisation. Unit vale realisation for a kgof exports has moved up to R1181.85 from R714.51 per kg during the same period of last year.

However, Subash Nanda, a prominent trader and member of the Essential Oils Association of India feels that the crop is not on the lower side. “Farmers are holding on to the crop expecting a huge gain. Only 40% of the crop has arrived at the market so far. Prices have gained due to the tight supply,” he said. It is estimated that more than 77,000 hectares is under mint cultivation with more than 90% of the production coming from Uttar Pradesh.

Source : financialexpress.com