Supply-demand mismatch is likely to bring down mint oil prices as production area increases rapidly in the country. According to a Spices Board publication, production area has increased by 40% in the last one year on the back of high prices. The publication also mentions that the demand for the product for 2007 stands at 20,000-22,000 tonne, while the overall availability is at 67,000 tonne. Production for 2007 is estimated at 45,000 tonne and the carry over stock from 2006 at 22,000 tonne. Mentha oil is derived from a plant named Mentha arvensis or common mint. Mentha is primarily grown in Sambhal, Chandausi, Barabanki, Bedayun, Ram Nagar, and Bareily all in Uttar Pradesh. The higher realisation for mint has seen newer areas like Bihar turning to it. With the help of steam distillation process, mentha oil is obtained from the fresh leaves of that plant followed by the separation of menthol from it. The commodity is mainly used in the pharmaceutical industry. A sizeable amount is also consumed in the manufacture of toothpaste, chewing gum, and pan masala.
Experts blame the futures trade for the artificial zooming of price, which led to rise in area under cultivation. It is estimated that 77,000 hectares is under mint cultivation with more than 90% of the production coming in from UP.