BRIEF REPORT ON MENTHA OIL

General Characteristics
Mentha oil is obtained by steam distillation of Mentha arvensis leaves. Mentha oil and its constituents and derivatives are used in food, pharmaceutical and perfumery and flavouring industry. Menthol is the main constituent of mentha oil and slow cooling through refrigeration, crystallization,

centrifugation and drying is done to obtain it. It is used in the manufacture of lozenges, toothpastes, pain balms, cold balms etc. Mentha is widely cultivated in India and its leaves are used in making sauces/chatni in most households.

Supply Demand Scenario

India is the largest producer and exporter of menthe oil in the world. At present the major producers of mint oil in the world are India, China, Brazil and the US. Mentha arvensis is cultivated in India in the semi- temperate regions in the foothills of Himalayas in Punjab, Haryana, Himachal Pradesh, Uttar Pradesh and Bihar. The all-India area under mentha in the country is estimated at about 1,25,000 hectares.

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 India exports different types of mint oils to a number of countries including Argentina, Brazil, France, Germany, Japan, UK, USA, etc. these varieties include the Japanese mint oil (derived from Mentha Arvensis), peppermint oil (Mentha Piperita), dementholised Japanese mint oil, spear mint oil (Mentha Spicata), water mint oil (Mentha Aquatic), horsemint oil (Mentha Sylvestries), Bergamont oil (Mentha Citrate) and still others. India cultivates about eight species of mentha however three species are approved / recognized by the purpose of quality standards and international marketing. The natural oil yields on an average 40-50% menthol and 50-60% dementholised oil, which can be used both in confectionery and medicine in place of imported peppermint oil. Japanese mint oil is not distinguished from the peppermint oil in the Indian trade.

Menthol Production in India

The cultivation of Mentha Arvensis in India is a dramatic & very successful story. Before, 1964, there was no production of Mentha Oil & Menthol in India. The cultivation of Mentha Arvensis was started around 1870 in Japan so it is also called Japani Mint than extant in Brazil, China and Formosa etc. Col. Mr. R.N. Chopra & Dr. I.N. Chopra of Regional Reserch Laboratory Jammu Tawi first brought Mentha Arvensis in 1964 and with the best efforts of Mr. S.C. Bante Managing Director Hindustan Richardson Ltd (VICKs), the commercial cultivation could be started in India. The survey conducted by Richardson Hindustan Ltd. determined that Tarai Area of Uttar-Pradesh would be a suitable place for the cultivation of Mentha Arvensis so a land of 15 Hectares was purchased to setup an Agriculture Research center for Mentha. The crop of mentha successfully grown and when the mentha oil was extracted by Steam distillation, mentha crop became a

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viable. Hindustan Richardson Ltd. established a distillation unit in BILASPUR of district Nanital so confidently the Farmer could grow Mentha Herb. They had supplied the planting materials as well as given technical knowledge to grow the Mentha herb. As the result the area of mentha crops substantially increased in entire tarai and western districts of U. P. mainly Nanital, Rampur, Moradabad, Badaun, Bareilly and recently extended to eastern districts viz. Barabanki, Lucknow & sitapur districts. 80% crop of India, grown in Ut tar Pradesh, rest 20% in Punjab, Haryana. In these two years crop of Mentha Herb developed MP & Gujrat but in little quantity. With the best efforts of Farmers Small Scale Industries and CSSIR laboratories RRL Jammu, CIMAP Lucknow, India is one of the largest producer of Menthol & Mint allied products in world now second one is China. Presently 85% production of Mint products is in India, rest in China, Brazil & other small countries.

Crop Combination for Higher Profitability

Maize Paddy Basil Paddy Paddy

Potato Potato Potato Lahi Wheat

Mentha Mentha Mentha Mentha Mentha

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Seasonality
Time of Plantation (Crop) Mentha Arvensis Mentha Piperita Mentha Spearmit January 2nd wek to Feb. Last Dec. Last week to Jan. Last Dec. Last week to Jan. Last Time of Plantation No. of Harvest 2 2 2 60kgs to 90kgs 40kgs to 60kgs 40kgs to 65kgs Oil Yield Per Acre

Year wise cultivation Mentha Oil

Year Area Heqtor

&

production

of

Production of Mentha Oil

1965 1970 1975 1980 1981 1985 1988 1990 1992 1995

65-70 600-650 4000-4500 8000 10000 18000 25000 35000 38000 45000

2 46 260 500 800 1400 2200 5000 5400 7000

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1996 1997 1999 2001 2003 2004 2005

35000 55000 62000 65000 72000 70000 -

5500 11000 12000 13000 15000 14000 18000-20000*

*- Industry Projections

Present Demand
Domestic (India) Export (Overseas) 4000-4500 MT. 7500-8000 MT.

Exports
At present the major producers of mint oil in the world are India, China, Brazil and the US. India exports different types of mint oils to a number of countries including Argentina, Brazil, France, Germany, Japan, UK, USA, etc. these varieties include the Japanese mint oil (derived from Mentha Arvensis), peppermint oil (Mentha Piperita), dementholised Japanese mint oil, spear mint oil (Mentha Spicata), water mint oil (Mentha Aquatic), horsemint oil (Mentha Sylvestries), Bergamont oil (Mentha Citrate) and still others. Mentha Oil export has steadily increased from India in the recent years. In the year 2004-05 India impressively exported 9160 MT.

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 Although domestic demand for this product has increased on the wake of higher activity by domestic cosmetic and perfume industry. Present domestic demand for menthe in domestic market is estimated to be 4000 MT to 4500 MT.

Global Price
The price trend of menthol is directed by the status of production in India and China that predominantly depend on the weather conditions. Any irregularity in the weather condition can wither the output and hence could place the commodity on higher quotes. China is good consumer of Indian menthol. Current crop year, in the international market menthol price remained in the range of $16-$21, depending upon the supply scenario.

Current Scenario
The country is set to see a bumper crop of mentha this year on the back of higher acreage. The output may jump by over 150 per cent compared with the last years figures of 18,000-20,000 tonne. Mentha oil is an export oriented commodity, recent strengthening of INR Vs Dollar will further lead to bearish sentiments. Indian rupee has appreciated by 6.8% from March making the export parity down. Traders are expecting an overall output of 30,000 - 35,000 tonne, which will start hitting the market by the end of May. The consumption of mentha oil in the country is around 9000-10,000 tonne per annum. The country already has a carry forward stock of over 3,500 tonne.

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 The increased acreage is because of the farmers inclination towards mentha production as the crop fetched them better realisation last season. Inter-cropping led to higher plantation. In between potato crop, mentha crop has been sown this time. The rains in January and February in the northern part of the country also proved beneficial for the crop since it requires a good amount of water at its initial stage. The weather condition has been subsequently warming up to the optimum level, which is what the crop needs at this stage. The yield too is on the upside. An average yield of 80-90 kg per hectare against 50-70 kg per hectare last year is expected. Though the exact acreage is not known so far, in Uttar Pradesh alone (the largest producer of mentha oil), the minimum acreage is 1,25,000 hectares and this can even go up to 1,50,000 hectares. Across the country, the acreage is expected to reach 2,25,000 hectare. Haryana, Punjab and Himachal Pradesh are the other mentha-producing states. The envisaged situation of plenty could well trigger a fall in the price of mentha oil. However, any such possibility may be offset by stockists or farmers opting to stock the commodity themselves, according to analysts. Mentha oil can easily be stored for as long as 7-10 years. With new mentha crushing and processing plants coming up in Jammu and Kashmir and even in Himachal Pradesh, the processing of excessive production may not be difficult, said market players. The available stocks of mentha in the warehouses of the commodity exchanges amount to around 500 tonne at present. October-December is the period when export of mentha oil reaches its peak.

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 After meeting the domestic and export demand, the country would be left with a carryforward stock of at least 6,000 tonne.

Technical outlook

SELL MCX MENTHA MAY IN THE RANGE OF 575-585 RANGE FOR TARGET OF 546, 526 WITH A STOP LOSS OF 597 OR SELL MCX MENTHA MAY BELOW 564 FOR TARGET OF 540, 526, WITH A STOP LOSS OF 586.50

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