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Mentha oil users expect lower prices with higher output

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Sharleen D'Souza Mumbai
Last Updated : Jan 20 2013 | 2:17 AM IST

Expectations of higher production of mentha oil this year has brought relief to user industries such as pharmaceutical companies, cosmetics and chewing gum.

The acreage of mentha went up by 14-15 per cent this year. The expectation is for metha oil output to rise to 42,000 tonnes from 35,000 tonnes last year. This has caused mentha oil futures to cool. It is now Rs 850 per kg for June futures from Rs 1,338 per kg in November on the Multi Commodity Exchange. The latter price was an all-time high, due to strong export demand.

Harsh Agarwal, director of Emami, said, “The cost of raw material will come down for the products in which we use mentha oil, but it is too early to say by how much it would bring down the cost of production.”

“Producers of chewing gum using mentha oil will see an overall relief of one to two per cent in production costs,” said Jayant Ambast, director, supply chain, South Asia, Perfetti Van Melle India.

“A further decline in mentha oil prices are expected, as the arrivals season is on,” said Ajay Kedia of Kedia Commodities.

Total arrivals in the major spot markets in Uttar Pradesh (around 90 per cent of all mentha oil comes from this state) have been steady at 800 drums (360 litres to a drum) a day for the past three days. It was 600 drums on Monday. Demand on the spot market is weak, pressurising prices downwards. It is quoted at Rs 942 per kg on the spot market, down by Rs 18 from yesterday.

“In the long term, mentha oil prices will ease, owing to higher acreage and better production,” said Pretish Gupta, a trader in Uttar Pradesh.

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First Published: Jun 24 2011 | 12:59 AM IST

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