Encouraged by higher realisation last year, farmers are likely to bring more area under the mentha crop this year. As a consequence, the acreage under mentha is estimated to rise 20 per cent this year.
In Uttar Pradesh, India’s largest producer of the commodity, the acreage is forecast to rise to 210,000 hectares (ha) this season, compared to 175,000 ha last year. Traders hope sowing area would rise further on farmers’ enthusiasm on the basis of last year’s realisation.
Around 20 per cent additional area under any crop may translate into nearly 20-25 per cent of more output. This would prove largely a relief for user industries including pharmaceutical, cosmetics and confectioneries, as last year’s rocketing price squeezed their margins significantly.
The price of mentha oil, a derivative of mentha, shot up last year on rising consumer demand, especially from industries like confectionery and cosmetics. Since mentha oil has no substitutes, user industries continued to buy at the market price. As a consequence, the price of mentha oil for near-month delivery on the Multi Commodity Exchange (MCX) surged 112 per cent to Rs 2,465 a kg from Rs 1,159 a kg last year.
“Supply has dried up in the spot market due to the ongoing lean season. But, demand has been robust from both domestic as well as international markets. Many global buyers are awaiting the new season arrivals to begin booking afresh to meet their next year consumption. Hence, the demand for mentha oil is expected to remain robust even in the next season,” said Girish Kumar, a Chandausi, a Uttar Pradesh-based trader.
Total production of mentha oil was recorded at 35,000-36,000 tonnes last year, which is expected to surpass 42,000 tonnes this year on higher acreage. However, prices are unlikely to see any downward move from the current level on strong demand abroad. Also, the carryover stock this year is estimated to be negligible.
Ajay Kedia, managing director of Kedia Commo-dities, said, “The mentha oil price may hit Rs 3,000-a-kg level before the new season crop hits the market.”