After introduction of futures trading in mentha oil, which is used by the food, pharma and flavouring industries, exporters and domestic industries have been using commodity exchanges for sourcing the material, which has resulted in integration of the physical market with commodity bourses such as MCX, an indepdent study has stated.

Integration of the mentha oil futures trade with physical trade, especially exporters and manufacturers, is enabled by the existence of liquidity in the exchange and although deliveries are only a very small part of total futures trade even for mentha oil, a significant chunk of the physical trade volume indicated that the futures institution has integrated with physical trade, a study titled Impact of futures markets of mentha oil on farmers has stated.

Conduted jointly by IIM Kolkata and NISTADS, an institute affiliated to CSIR, it stated that futures trade in mentha oil has also enabled quick dissemination of information on variation between different local prices in commercial centres.

The emergence of a reference price has enabled importers and others involved in international trade (of crystals or processed mentha oil) to use the readily available reference to engage in contracting or in negotiations, the study commissioned by the leading commodity exchange MCX stated.

"MCX spot price information is most closely monitored by the commercial town traders in case of mentha", the study observed.