Mentha Oil: Plunging & Stagnating Prices

A notable recent trend in the Mentha oil price movement has been the sudden rise in the prices to USD 45 per kg in early 2012. This was followed by a sudden decline by the months of May and June in the same year. Since then, the prices have continuously been falling and the average price in 2013 had come down to approx. USD15-17 per kg.

The prices have further come down to an average of USD 13 per kg in the year 2014. The article tries to elaborate on the factors affecting mint prices and how are the prices likely to move in near future. India currently produces around 80% of the global Mentha oil supply followed by China & Japan. In 2005, Mentha oil started getting traded on MCX thereby giving a clear view of the price movements both for buyers and sellers. The prices of mint are highly volatile during the day due to the speculative activities on MCX. However, an understanding of the market reveals that the prices of Mentha oil would remain lull for the last quarter of 2014 and even for calendar year 2015. The prices are not expected to go beyond USD 16 per kg for the remaining part of 2014 and for the year 2015. The supply demand dynamics of Mentha oil is a major factor influencing the prices of Mentha Oil.

The other factor is the increase in supply of synthetic Menthol by Symrise, Takasago & BASF thereby adding to the already existing surplus pool of natural menthol. HISTORY OF MENTHA OIL By 1990, India had captured a very significant position as a leading supplier of menthol in the world market. Mint in India is largely grown in UP, Punjab & Bihar as a filler crop in the months of March & April, after the harvest of wheat or rice. India currently produces around 80% of the global Mentha oil supply followed by China & Japan. In 2005 Mentha Oil started getting traded at MCX in India thereby giving a clear view of the price movements both for buyers and sellers.

Author: Aditi Vijay