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Recent rise in demand on both spot and futures market expected to push up Mentha oil prices for short term. However, higher Mentha oil production has kept prices from reaching bullish trend for long term.

08 Dec 2012

NEW DELHI (Commodity Online): India's Mentha oil prices are showing up trend on both spot and future markets as a result of rise in winter season demand.

Recent rise in demand on both spot and futures market expected to push up Mentha oil prices for short term. However, higher Mentha oil production has kept prices from reaching bullish trend for long term.

Higher stocks and higher arrivals in mandis kept pressure on the market movements.

Mentha oil on India's Multi Commodity Exchange (MCX) for January contract was up by 1.62 percent at Rs. 1441.30 per 1 kilogram as of 10.55 IST on December,8.

Reacting to the MCX trend Milan Shah, Agri Research Manager at Commodity Online says that, “Over all trend is looking bullish. Profit booking is expected after recent buying and support seen near 1365 level while 1490 is the resistance.” “Buy on every dips and this view is only for short term.” points Milan.

Improved demand from pharmaceutical industries amidst reports of export queries kept sentiments up for the commodity. Demand from pharmaceutical industries have been noted and traders expect a firm trend for the commodity once exports pick up – says Religare Brokerage.

Earlier, ban on Gutka in some states had pressurized the prices of Mentha oil.

On the spot market, overall trading activities remained low but traders expect pick up in demand in the coming weeks.

Sowing activities have significantly increased this year due to last year's higher spot market prices. In Uttar Pradesh, the largest producer of Mentha oil, the area under sowing is expected to rise to 2.10 lakh ha as against 1.75 lakh ha of last year.

Mentha oil production this year likely to reach 50,000 tons against 38,000 tons of last year. Better Mentha oil production expectations have been keeping overall sentiments weak.

The large scale commercial cultivation of Mentha is done in Uttar Pradesh, Punjab, Haryana, Himachal and Bihar.

Mentha cuttings are sown in the month of December and harvested during March-April. Generally, Mentha oil arrives in market in the month of June-July. Menthol is the major derivative product of Mentha oil.

Major share of the Mentha oil is converted into menthol and it is considered as one of the basic uses of mint oil.

Mentha oil is used for purposes like in the food, perfumery, flavouring and pharmaceutical industry. It is used in manufacturing of products like lozenges, toothpaste, pain balm, cold balm and others.

At present, India is the largest producer of Mentha oil in world contributing about 73 percent of global production followed by China, Brazil and USA.

The major destinations of export for India includes countries such as Argentina, Brazil, France, Germany, Japan, UK, USA and others.


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