Mentha oil spot and futures prices on the national exchanges may remain firm in the next few days on reports of nearly 20% crop damage in the major mentha growing areas supported by good demand from exporters and stockists.
Spot prices in Chandausi (Uttar Pradesh) have increased 48% to trade at Rs 834 per kg on Monday over the past fortnight. On the futures platform, MCX July contracts were up 41% to trade at Rs 740 on Monday over the closing rate of Rs 523.20 as on July 1, 2008 while NCDEX July contracts were also up 35% to trade at Rs 696.50 on Monday. Futures prices fell sharply in early intra-day on Tuesday and hit 3% lower circuit on some prompt selling pressure due to imposition of 10% special margins on buy open positions in all contracts by MCX on Monday, in addition to the 7.5% special margins.
“Overall harvesting of mentha leaves have been hampered due to heavy rains across the major growing areas. Hence, there are large possibilities of lower crop,” an analyst with Angel Commodities said. Till now, 55-60% of mentha crop has been harvested, he said.
More rainfall during harvesting stage damages the crop and leads to lower oil recovery.
Mentha oil recovery from leaves is expected to be lower around 30-35 kg/acre from 40-45 kg/acre, trade sources said.
Traders are expecting production to be around 30,000 tonne, lower from earlier estimate of 40,000 tonne. Fresh arrivals have just started with low pace but overall demand from exporters is good.