The domestic mentha market, which witnessed bearish sentiments last fortnight, may turn bullish and touch Rs 700 a kg in the coming days.
Harvest has been completed in the main growing belt of Uttar Pradesh, after incessant rains caused some damage. The damage is estimated to have been in the range of 10-15 per cent.
However, recovery of oil from mentha leaves has become a concern. “Distillation to extract oil is not picking up,” said Kunal Shah, commodity analyst at Motilal Oswal.
The recovery of oil could dip by 10-15 per cent, an analyst at Angel Commodities said. The plucked leaves need to be dry for better oil recovery. “However, due to unfavourable weather, the drying process did not progress well,” the analyst said.
Meanwhile, reports suggest that some farmers in UP have stocked up the produce and are not sellingit in the mandis below Rs 650 a kg. This has impacted supply, which currently is in the range of 500-600 drums (each of 180 kg) against the normal 1,000-1,100 drums at this time of the season.
Though acreage under mentha had risen substantially this season and traders were expecting a crop size of more than 40,000 tonnes, recent reports indicate that production will be on a par with last year’s 33,000-35,000 tonnes.
Bhuvnesh Kumar Varshney, a Chandausi-based mentha trader, said, “Till Raksha Bandhan there does not seem to be any rally in market. But after that if demand picks up momentum, prices could go up.”
On the futures front, mentha oil shed over Rs 25 a kg last week. However, on account of good exports and expectation of lesser crop, the commodity might bounce back.
In Chandausi, spot rates being quoted on Monday were at Rs 665 a kg, up Rs 5 compared to last week’s prices. On the National Commodity and Derivatives Exchange, the futures market jumped on Monday.
The September contract closed at Rs 740 a kg against the last week’s closing of Rs 682, up 8.5 per cent whereas the October contract was up by 10.16 per cent at Rs 770 a kg.
