Mentha oil price set to rise on demand

Commodity traders’ interest in mentha oil has increased substantially and open interest (OI) has gone up significantly in the last week, as the prices are seen to be going up due to an increase in demand. On the Multi Commodity Exchange (MCX), the OI in the commodity has risen 26.7 per cent from 2,030 tonnes to 2,573 tonnes in a week.

Mentha oil prices are expected to rise in the coming weeks on the back of a strong demand from pharmaceutical companies, besides export demand, analysts say.

Since June 1, the commodity on the Chandausi spot market has gained 15 per cent, despite higher production this year, but the carryover stocks still remain limited for the commodity.

 

Uttar Pradesh produces 90 per cent of the oil production, used in pharmaceutical and cosmetics.

Total arrivals of mentha oil in all the major mandis in Uttar Pradesh have fallen to 710 drums a day (360 litres a drum), against 800 drums a day around a fortnight ago.

The total sowing in the state was about 190,000 lakh hectares (ha), higher by around 60,000 ha from the previous year.

The total production is likely to be 42,000 tonnes this year, 20 per cent higher than 35,000 tonnes last year.

“Factoring in the arrivals condition, weather forecast and demand for mentha, the bull run is set to continue next week and may go as high as Rs 1,140-1,160 a kg on the higher side, while support is seen at Rs 1,050 per kg on the lower side,” said Ajay Kedia of Kedia Commodites.