Commodity spikes

Poor demand and stagnating spot markets have drastically pulled mentha oil down over the last week. The period saw a decline of over 7 per cent, with market experts predicting a further fall. Buyers from the overseas market have not turned up, taking a toll on the prices. Moreover, the record production this year of above 30,000 tonnes against the last season's output of 20,000 tonnes is keeping the market under pressure. The near-month contract on the National Commodity and Derivatives Exchange (NCDEX) has, over the last month, seen a fall of 16.4 per cent from Rs 500 a kg to Rs 418 a kg. Market sources said that there was no movement in the physical markets in Uttar Pradesh (the major producing state of mentha). Ascertaining the actual rates of the commodity has become difficult, they added.

According to commodity analysts tracking mentha oil, the coming week too is not expected to see any buying pressure. As a result, they added, the market could drop all the way to Rs 400-410 a kg. Another factor stoking the bearish sentiment in the market was the recent notification from the UP state government, imposing a mandi tax on mentha of around 2.5 per cent. It has created confusion among the trading community as the order is expected to be implemented with retrospective effect. On NCDEX, the contract for December delivery closed at Rs 418 a kg on Saturday against the previous weekend's close of Rs 450 a kg, down 7.11 per cent.

Maize up on exports

Though the maize market was expected to remain steady with a bearish tone on the back of over 10 per cent increase in kharif production, the maize futures market has shown a bullish trend. According to sources from the maize-based industry, unchecked exports from the country is stoking bullish sentiments in the market. The last one month saw maize futures rising by over 9 per cent from Rs 700 a quintal to the current Rs 765 a quintal. Moreover, as starch manufacturers too are procuring maize rapidly in anticipation of prices scaling up to higher levels, the market is witnessing a large demand. Market sources said that maize arrivals still contained higher levels of mositure. Once maize with lesser moisture content arrives, the procurement process would accelerate.