Mentha product exports likely to increase 30%

Exports of mentha oil products are set to scale up by 30 per cent this year. Market experts said that the country being one of the few growers of mentha, exports may reach beyond 18,000 tonnes against 14,000 tonnes last year.

Total production of mentha oil in the country is estimated to around 30,000 tonnes. Domestic consumption will corner around 9,000-10,000 tonnes, leaving almost a carry-forward stock of not less than 2,000 tonnes.

The surge in exports is despite the fact that the rupee appreciation has brought a slight slowdown in the exports with margins continuously squeezing. "Whatever exports are being done are of old bookings. Currently, bookings have slowed down," said Rajeev Saini, a Bareilly-based mentha oil trader. The current outgoing consignments of mentha products were booked in January-April period, much before the crop hit the market.

However, industry sources said that export will be on the higher side this year. At present, the spot rates of mentha oil in the mandis of Uttar Pradesh are ranging between Rs 510 and Rs 525 a kg. With processing and transport charges adding up another Rs 150 a kg, the overall cost of 1 kg of menthol bolds and crystals go up to around Rs 670 a kg (freight on board).

According to commodity analysts, the coming winter will see rise in demand from exports as well as domestic markets. India normally exports mentha products to China and the UK. "The rupee effect is there. But it will have no impact on exports as global demand is good and India is the only producer of mentha oil," said Rajeev Agarwal, another trader in Bareilly.

Several mentha oil processing plants (chilling plants) have sprung up in Jammu & Kashmir (J&K) as the players enjoy tax incentives there.

On the National Commodity and Derivatives Exchange, the near-month futures of mentha oil firmed up today and closed the trading at Rs 502 a kg against the previous close of Rs 488, up 2.87 per cent.

During the last fortnight, the commodity was trading between Rs 480 and Rs 495 a kg. The June-August period is normally the dull period as arrival pressure results in softening of the prices.