Marginal drop in mentha output likely

Rains in the northern part of the country are likely to hamper mentha oil output marginally. Though the exact decrease in yield is yet to be ascertained, market sources said there could be a slight decline in the oil production.

With the harvest already in progress, experts said the standing mentha crop would bear the brunt. They, however, added that rains would benefit the crop that would be harvested towards late July.

The likely impact on the crop was reflected in the mentha oil July contract.

The prices, which were expected to remain below Rs 500 a kg, in the range of Rs 480-500, have hovered over Rs 500 in the last couple of days. Moreover, the spot rates in Chandausi, which had slipped to as low as Rs 510-515 a kg, are now ruling around Rs 525-530 a kg.

"The oil recovery from the crop is also likely to be reduced, with the rains likely to hit the crop output," said Tanmay Kumar, an analyst at Agriwatch Commodities.

Subscribing to his views, Rajeev Agarwal, a Bareilly-based trader, said the yield may fall by 5-10 per cent. The country's crop is estimated at 33,000 tonnes this year, around 75 per cent more compared with the last year's output, which stood at 18,000-20,000 tonnes.

Meanwhile, there are reports of good demand from the domestic market. Demand from China, one of the major buyers of mentha oil besides US, may go up by 15-20 per cent over the last year's, said analysts.

They added that rains and good demand would provide support to the prices at the present level. Mentha is sown in phases, keeping the crushing season on from May to

August. The markets in Uttar Pradesh recorded a daily arrival of around 800 drums (each of 180 kg).