Mentha to stabilise around Rs 625-650 a kg

The mentha oil market is expected to stabilise within a fortnight following improved weather in Uttar Pradesh.

The prices, which had inched close to Rs 800 a kg recently when heavy rain in Uttar Pradesh resulted in a delayed harvest, will be seen between Rs 625 and Rs 650 a kg in the coming days. Trading sources said that selling pressure is developing in the mentha market, which is expected to bring a slump in prices.

 

FROM HOT TO COOL

Mentha prices had climbed to Rs 800 a kg when heavy rain in Uttar Pradesh resulted in a delayed harvest.

Market sources refute that rain damages are around 40%. They put the figure around 10-15%.

The ouput is quoted at 32,000-34,000 tonnes. Arrival in the UP mandis this week is around 500-600 drums as against 2,000 drums last year.

The prices of the commodity in the physical markets in Chandausi, Barabanki and Sambhal had reached above Rs 850 a kg on speculation that as much as 40 per cent of the crop had been damaged. However, market sources said it was an exaggerated figure and the actual damage was in the range of 10-15 per cent.

“We have surplus crop for mentha oil this year. Including the last season’s carry-forward stocks, which are in the range of 4,000-5,000 tonnes, the overall production will be more than the demand,” said Sandeep Sabharwal, chief business manager of New Delhi-based Sohan Lal & Co, who is also in charge of managing the mentha oil warehouse of the Multi Commodity Exchange (MCX) in Chandausi.

The domestic consumption of mentha oil ranges between 8,000 and 10,000 tonnes whereas export demand makes up a larger chunk of above 18,000 tonnes. Though so far the exact crop-size has not been ascertained, trading sources put the figure at 32,000-34,000 tonnes. If there had been no damage, the crop size could have reached 38,000-40,000 tonnes this year. Around 10-15 per cent of the harvest is still incomplete, which will be done by mid-August.

Over the last four days, the mentha-growing belt in UP has not seen rains, which has corrected the futures market by over Rs 100 a kg. According to research analyst tracking mentha oil in Angel Commodities, the coming days will see a further correction of Rs 30-40.

Since the beginning of this week, farmers who had held their stocks are quickly releasing their material in panic. According to trading sources, the arrival in the all UP mandis is in the range of 500-600 drums (each drum of 180 kg). Last year, the same period saw an arrival of 2,000 drums.