Mentha oil prices to go down in 2-3 weeks

The Mentha oil prices are likely to fall Rs 40-50 to Rs 600 for 1 kg in the next 2-3 weeks before firming up in December, analysts and traders said.

Stagnant local and export demand coupled with mounting stocks in exchange accredited warehouses are expected to act as a catalyst for the fall in prices.

Today, Mentha oil November contract on National Commodity and Derivatives Exchange (NCDEX) was trading in a narrow range of Rs 640-650 per kg.

Spot Mentha oil in the major markets of Barabanki, Chandausi, and Amroha in Uttar Pradesh, was at Rs 650-665 per kg.

According to a Chandausi-based trader, there is no major activity in spot markets as both demand and supply are stagnant.

"There is no demand on the export front and European buyers are waiting for prices to go down before they step up their purchases. They are buying only what they need," he said.

"Even supply by producers at this price level is restricted, since they don't need money due to end of festive season," Abhay Lakhwan, a Delhi-based trader, said.

However, some farmers and stockists are not ready to offload their stocks as they expect prices to cross the Rs 700-720 level in a month, when export demand is expected to revive, he said.

The NCDEX November contract has been continuously falling, barring few aberrations, in the last few weeks. It fell to Rs 640 per kg on Tuesday from Rs 720 in the first week of October. Open interest fell sharply to 400 tonne on Tuesday from 637 tonne on October 16, indicating steady unwinding of long positions by traders.

Mentha oil stocks in NCDEX accredited warehouses have also doubled to over 800 tonne on October 27 from less than 400 tonne on October 1.

According to some traders in Barabanki, stocks in the MCX accredited warehouses are between 800-1,000 tonne, most of which are likely to come for selling on the exchange.