Mentha oil up on robust demand

Mentha oil prices surged more than nine per cent in the last week owing to good domestic demand coupled with weak crop in China.

Spot price of mentha oil on the National Commodities and Derivatives Exchange (NCDEX) touched Rs 608 a kg, up 9.75 per cent from Rs 554 last Monday. The September contract was up 10.57 per cent to Rs 617 a kg from Rs 558 a kg last Monday. October contract went up by 11 per cent.

The spot price of mentha oil on the Multi Commodity Exchange (MCX) surged 9 per cent from Rs 553 a kg to Rs 598 a kg during the last week. September and October contracts saw a rise of Rs 56 and Rs 57 a kg respectively.

This is the fastest price rise in the last one month in the mentha oil, which was showing a range-bound volatility.

"Speculative buying, good domestic demand and weak crop in China (the main probable importer of mentha oil) are the factors responsible for taking the market up," said a commodities analyst.

The prices in the spot and the futures market may see another jump of Rs 50 in a week, he added. Interestingly, the price rise has come at a time when arrival of the new crop in the market is high.

"At present, there is a supply of 200-300 drums (approx 180 kg) a day in the domestic market compared with 100-150 drums a day normally", he said.

Market experts said the investors were piling up their stocks in anticipation of larger export demand. Last year, the country exported a negligible amount of mentha oil to China. However, this year, demand from China could go up to 2,000 tonne, said sources.

At present, the country has a stock of around 12,000 tonne of mentha oil.