Prices of mentha futures on national exchange platforms are expected to remain under pressure on steady inflows supported by huge stocks with exchange warehouses and a slowdown in demand.
On the Multi-Commodities Exchange (MCX), mentha oil October contracts fell sharply to Rs 526.20 on Saturday from a recent peak of Rs 810 per kg as on July 25, down by over 35%, while the spot price at the Chandausi mandi was quoted lower at Rs 590.65 per kg, from Rs 812 a kg (in July-end), down by nearly 27%. During October also, spot and futures prices continued to rule weak on increased inflows amid a slowdown in local as well as overseas demand.
?An average of daily arrivals of 350-400 drums was registered at all major markets of north India during last week, while fresh demand from exporters and local manufacturers remained absent as they were still waiting for prices to fall further in the days to come,? a leading broker said.
The total stock with MCX-registered warehouses stood at 10,500 drums (each of 180 kg) as on
October 14. Huge stocks at exchange warehouses are putting pressurise on mentha prices as most traders prefer exchange platforms to deliver mentha oil. ?International trade was thin, with only a few deals reported last week,? an analyst said.
?We expect the futures to continue trading in a narrow range with a weak bias, in the coming week as demand from international and spot markets will more or less constant. However, higher seasonal demand from local and overseas buyers in winter might help mentha prices recover and trade with firm sentiment in the medium as well as long term,? an analyst with Angel Broking said.
In 2007-08, production was estimated around 30,000 tonne-32,000 tonne which is lower than the earlier estimate of 40,000 tonne, sources said.