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Spot Mentha Extends Rally As Futures Breach Rs 1,500-Level

11 Jul 2018 7:25 pm
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NEW DELHI (Commoditiescontrol) - Mentha oil prices continued to rally at key markets of Uttar Pradesh on Wednesday amid a sustained momentum in futures trade in the wake of disruption in supply, low inventories and rising demand.

As per trade sources, short-term trend is likely to remain buoyant as the inclement weather with rains have disrupted crushing at key producing centres, resulting in a supply shortage. Besides, farmers are also holding back produce, expecting more gains ahead. Overall the supply is now insufficient to meet the demand.

Also, the export demand which has started gaining momentum gradually on the back of enquiries from China and Europe over the last few weeks is pushing the upward march.

Meanwhile, Multi Commodity Exchange (MCX), the country’s largest commodity derivatives exchange, has doubled the total additional margin to 10 percent on both buy and sell side of all running/existing contracts of mentha oil from Monday.

However the supside move is unlikely to sustain with pick up in arrival/supply. According to market sources, with arrivals of new crop set to rise in the coming weeks with clear weather conditions, prices may see correction.  However, despite it being the harvest season and production expected to surge, prices of the mentha oil are significantly higher than the historical trend, thanks to negligible inventories of mentha.

In 2017-18 (Apr-Mar) mentha oil production was estimated around 30,000 tonnes. With an opening stock of 7,000 tonnes, the market was under supplied, considering the total consumption of 38,000-40,000 tonnes from domestic and export market, said a trader.

Even if one considers unaccounted stocks with small traders and growers, the overall carryover stocks may not be more than 1,000 tonnes for 2018-19, he further said.

According to market experts, conducive weather and a 25 percent rise in acreage can result in production of 40,000-41,000 tonnes of mentha oil in 2018 compared with around 30,000 tonnes produced last year.

On the other hand, demand from overseas buyers like China and US is also not picking up and exports are not very promising at this time.

India meets around 80 percent of the world natural mentha oil demand with its use in pharmaceutical, food safety, culinary, cosmetics, insecticides, scent and aromatherapy.

The country annually exports around 20,000 -25,000 tonnes of mentha oil and allied products to the US, China, Europe and South America.

The exports of mint products were 21,500 tonnes worth Rs 3,228.35 crore in FY 2017-18 as against 22,300 tonnes valued at Rs 2,527.50 crore in FY 2016-17, according to Spices Board.
 

Mandi  Sub_Var1 Price Prev_Price
Barabanki 68GLC 1730 1700
Chandausi 73GLC 1720 1700
Sambhal 81GLC 1680 1590
Rampur 68GLC 1650 1570


At the Multi Commodity Exchange (MCX), mentha oil for delivery in July rose further by Rs 58.40, or 3.99 percent, to Rs 1,520.50 per kg, with an open interest of 1,369 lots.


Similarly, the oil for August delivery was trading higher by Rs 59.10, or 3.99 percent, to Rs 1,538.80 per kg, clocking an open interest of 872 lots.

(By Commoditiescontrol Bureau; +91 9582843581)

 

 


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