Punters, traders and `patrons' in the illegal forward markets for menthol in Delhi find themselves squeezed with the plunge in prices, which according to traders, was rumoured to touch Rs 1,800-1,900 per kg for big lots.

Currently, menthol is available at around Rs 700-800 per kg. Little wonder therefore, those entrapped in the illegal forward markets refuse to lift their commitments made earlier at higher levels.

On the international front, menthol is currently being quoted at US $15.5 - 16.3 per kg (around Rs 630-780 per kg). In October last, it was quoted at a high of US $27 per kg (around Rs 1,100 per kg). The prices have slowly tapered off, and menthol is back to around US $18-19.5 (around Rs 774-813) per kg.

Traders in Delhi'sillegal forward market had raised menthol prices to a high of around Rs 1,500 per kg in November-December 99, saying there has been a huge loss of cormint crop (main ingredient for menthol) in China.China is said to be the main supplier of menthol in the international markets and India imports around 40 per cent of its menthol requirement from China.

In August -- September 1999, menthol prices were relatively stagnant at around Rs 600-700 per kg. On rumours of cormint crop failure in China, traders and punters had been successful in luring even small players wanting to make a fast buck on the market to buy large quantities forward.

However, with facts coming to light of actual loss of cormint crop in China to just around 10-20 per cent, the bubble of bloated prices burst leading to normalcy - Rs 700-750 per kg that prevailed around mid-1999.

Traders in Mumbai say, one Delhi-based Kamal Trading Company had purchased around 100 tonnes of menthol in stages at various price levels ranging between Rs 800 andRs 1,200 per kg. With the crash in prices, the firm is now in trouble to sell its menthol stock purchased at high prices.

One of the major reason for menthol price shooting up in last quarter was the miscalculation of India's cormint crop, traders say.

Contrary to initial estimates of 7,000 metric tonnes, India's cormint crop is now estimated higher at around 10,000 metric tonnes.

During January to March 1999, the Chinese traders are understood to have bought 1,500 tonnes of Indian menthol.It is known that China is making less peppermint than they have in the past. China is using more internally and exporting goods that contain peppermint oil and also large consumers of menthol.

Also, China is said to be consuming more menthol than earlier. China makes less menthol than they made before, indicating India covers up the demand supply gap.

With the Indian crop larger than initially estimated, it will have more to export. That puts Indian menthol in a position similar to the last three years, whenprices of menthol will be below Rs 550 per kg.