Mentha oil production to cross 25,000 tonne

Mentha oil output is likely to cross 25,000 tonne in the current calendar year, as compared to about 20,000 tonne last year, due to bumper mentha crop and higher yield.

Mentha was sown over a considerably larger area this year, as prices breached the psychological barrier of the Rs 1,000-per kg mark last year.

Mentha is said to have been sown over one-and-a-half times the area sown last year and the yield is also likely to be about 50 per cent higher this year, a report from NCDEX said. There are no official estimates of the area under mentha.

However, some traders are sceptical about higher yield this year. They say that though the area under mentha cultivation is higher, yields may not be too high due to unfavourable climatic conditions. High temperatures since February and a falling water table in Sambhal, Rampur and Chandausi will affect crop yield this year, as mentha is a water-intensive crop and requires about 20 irrigations during the crop cycle.

Average yield is about 30-35 kgs of oil per acre. This year, the yield may dip below 30 kgs per acre at some places, the report said. Mentha is primarily grown in Sambhal, Chandausi, Barabanki, Bedayun, Ram Nagar and Bareily-all in Uttar Pradesh.

One indicator of lower production estimates is the fact that traders have been taking deliveries at the exchanges. Many of them are even exploring the hedge position limit to take deliveries.

On the NCDEX, April mentha oil had high delivery allocations due to tight supplies in spot markets. NCDEX April saw delivery of 4,91,760 kgs, compared to 2,27,520 kgs in March.

Another 2,49,180 kgs have been delivered in the month of May.

Mentha crop (mint leaves) are usually sown in February and harvested from mid-May onwards. Early harvesting has already commenced at a few places in Uttar Pradesh and the first arrival of nine kgs of mentha oil from the new crop was reported in Bahjoi, a small village in Moradabad district, according to market sources.

Mentha oil prices are expected to remain higher this year due to high cost of mentha production by farmers.

Oil producers are likely to hold the sale till the prices are high enough to cover their costs of cultivation, as well as some profits.

This year, the cost of cultivation was up substantially as power availability was poor and most farmers have been using diesel-run generator sets for pulling irrigation water. Unless they get at least Rs 400 a kg, it is unlikely that they will sell.

India is one of the world's largest producers of mentha oil and exports nearly 80 per cent of its produce to Argentina, Brazil, China, the UK, France, Germany, Japan, and the US.

The country exported around 11,675 kgs of mint leaves worth Rs 20 lakhs in 2005.