Mentha oil futures dip on low demand

Lower than expected demand is pushing mentha oil futures down. Prices have fallen by around 10 per cent in the last eight trading sessions since the beginning of this month. Market sources say the fall may continue further but added it will stabilise within two weeks.

"In the current situation, there is no demand from the international market," said a Bareilly-based mentha oil manufacturer. "Domestic as well as exports demand is on the lower side. At the same time arrivals are steady," said Indranil Mukherjee, commodity analyst, Angel Broking.

He added that prices may slip to Rs 550-560 per kg before it stabilises at those levels as domestic buyers are expected to return back to the market.

In Bareilly and Chandausi physical market, the prices of mentha oil on Friday were around Rs 605-610 per kg. However, traders said that it could see a decline of Rs 15 soon.

This year, India, approximately produced 22,000 tonne of mentha oil. Of which, sources say, around 8,000 tonne remains in the stocks.

The US is the largest market of the Indian mentha oil. However, due to crop losses in China his year, mentha oil is being exported to China as well.

Market sources added that China had put early enquiries on the back of lower output there and has already filled its quota. The Chinese demand is expected to be around 2,000 tonne this year.

On the National Commodity and Derivatives Exchange (Ncdex), November futures closed at Rs 587 on Friday, 9.3 per cent down against closing price at Rs 646 a kg at the start of the current month. Similarly, December contracts too slumped by 9.97 per cent to Rs 596 from Rs 662 on November 1.