Mentha oil prices have surged 18 per cent in just 18 days, hitting a 4-month high on the back of an expected fall in output.
Anticipated robust winter demand from FMCG industries and consistent export inquiries will further bolster its prices.
Moreover, the export market could benefit from rupee depreciation. These factors collectively shape a promising outlook for mentha oil’s market trajectory.
Mentha oil production in 2022–23 was only 41,937 tonnes against 48,389 tonnes in the previous year. This led to an increased reliance on synthetic menthol, which impacted the price of mentha oil.
In 2023–24, the production of mentha oil is expected to drop 23 per cent further to 32,259 tonnes.
Synthetic menthol production is also expected to decline by about 20 per cent from 4,193 tonnes to 3,355 tonnes.
Overall, the low supply and production of mentha oil in recent years have significantly impacted prices.
“As we look ahead, the trend of lower production may continue with prices remaining strong due to supply constraints,” said Kedia Commodities.
Mentha oil prices have already risen to ₹1,000 a quintal after making a low of about ₹850. This bullish trend is expected to continue, as the carry-forward stock of mentha oil has also declined significantly, it said.
Last year, the carry-forward stock was at about 6,693 tonnes and this is expected to fall to 246 tonnes due to the combination of lower supply and declining production.