MENTHA OIL

Multi Commodity Exchange of India Limited (MCX) is a state-of-the-art commodity futures exchange
based in India. The exchange facilitates online trading in commodity futures contracts across segments,
including bullion, base metals, energy, and agricultural commodities, besides offering clearing and
settlement services. The exchange thus provides an effective mechanism for price risk management.

INTRODUCTION
= Mentha oil is derived by steam distillation of Mentha arvensis (a Japanese mint) leaves, the basic raw
material required for the production of menthol.
= In India, there are two types of menthol: crystals and flakes. Menthol is available in different shapes and
sizes, such as large crystals (bold), medium crystals, small crystals, and flakes as powder.
= Menthol crystals are the basic ingredients for toothpaste, mouth freshners, pharmaceuticals, ayurvedic
and Unani medicines, chewing tobacco, pan masala, pain balm, confectioneries, cosmetics, and fragrance
industry.
CROP OVERVIEW
= The sowing season of mentha starts during February–March every year. The crop takes 90 days to mature
(vegetative) and produces its first flowers then. This is the best stage to harvest. The crop harvesting is
done during May and June.
= Mentha leaf is a commercial part of the plant, including young flower buds, which contain volatile
MCX is a leading mentha oil. Its leaves are sun-dried for higher oil yields.
commodity = Leaves and flowering tops give the highest yield. Distillation of dried leaves is cheaper than that of fresh
leaves.
exchange in India, = Through steam distillation and filtration, a golden yellow volatile oil is obtained. Menthol flakes can be
with a market separated in a crystalline form on cooling the oil. The remaining (de-mentholized) oil is used in
confectioneries and flavouring.
share of 84.06%* = The manufacture of menthol flakes is commercially done by a few firms in Delhi, Mumbai, and Gujarat.
(2014-15) There are several small distilleries in UP that produce menthol flakes and de-mentholized oil.
*In terms of the value of commodity
futures contracts traded = Major mentha oil markets in UP are Chandausi, Sambhal, and Barabanki. Distilled mentha oil is brought
(Source: FMC Data, May 2015) into these markets by farmers and producers to commission agents. According to their requirements,
mentha processors, crystal manufacturers, and exporters purchase the oil from the market.
= About 200–250 drums (1 drum = 180 kg) arrive in the markets during the peak season (June–November);
the arrivals declining thereafter.

Mentha oil: Production and exports

45,000 350
40,000 300
35,000
250
in '000 hectares

30,000
25,000 200
in MT

20,000 150
15,000
100
10,000
5,000 50

0 0
2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15
For private circulation only.

Production Mentha oil exports Area

 DEMAND AND SUPPLY
= The global production of mentha oil stands at around 48,000 metric tonnes (MT). In India, the production
of mentha oil was about 38,000 MT, covering an area of around 0.30 million hectares with an average
productivity of around 120 kg per hectare during 2014.
= India is the largest producer and exporter of mentha oil. At present, the major producers of mint oil in the
world are India (80%), China (09%), Brazil (7%), and the U.S. (4%).
= Mentha arvensis is cultivated in semi-temperate regions of the Himalayan hills—UP, Himachal Pradesh,
Punjab, and Bihar.
= India cultivates about eight species of mentha, out of which three are exported. Spices Board of India
pegs total exports of mentha and allied products in 2014–15 at 25,750 MT (valued at `2700 crore at base
price of `1044.37 per kg), which has crossed the target by 123%.
= India exports different types of mint oil to countries including China, the U.S., Singapore, the Netherlands,
Germany, the UK, France, Brazil and Japan. The major export varieties include the Japanese mint oil
(derived from Mentha arvensis), peppermint oil (Mentha pipertia), de-mentholized Japanese mint oil,
spearmint (Mentha spicata), water mint oil (Mentha aquatica), horsemint oil (Mentha sylvestries), and
Bergemont oil (Mentha citrate).

Countrywise mentha exports, 2013–14

Japan 2% Brazil 2%
France 2% Phillipines 1%
Spain 1%
Others 1%
Indonesia 2%

U.K 3%
Germany 5%
Singapore 5%
China 55%

Netherlands 5%

U.S. 16%

FACTORS INFLUENCING THE MARKET

International
MCX is
st
= Import demand from major importing countries such as China, the U.S., and Singapore.
India’s 1 = USD–INR rate, the commodity being export-oriented.
listed exchange = Price of synthetic mentha oil in international market.
Domestic
Production related
= Mentha oil price is influenced by an increase or decrease in the mentha crop acreage, which depends
on the climate during sowing and the price realization in the previous season.
= Prevailing weather conditions; the incidence of cold wave and heavy rains are harmful during leaf
formation.
= Quantum of arrivals during the harvest season.
Consumption
= Domestic demand from pharmaceutical companies which usually increases in winter.
= Export demand from importing countries.
Stocks
= Mentha oil stocks in MCX-accredited warehouses, carry forward stocks, and stocks available with farmers
are key indicators of supplies and influence prices.
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 Mentha oil price trend

1400

1200
Price (`/kg)
1000

800

600

400
Jan-14 Mar-14 May-14 Jul-14 Sep-14 Nov-14 Jan-15 Mar-15 May-15 Jul-15 Sep-15

Spot price Future price

CONTRACT SPECIFICATION OF MENTHA OIL

SYMBOL MENTHAOIL
Description MENTHAOILMMMYY
Contract listing Contracts are available as per the Contract Launch Calendar.
Contract start day 1st day of contract launch month. If 1st day is a holiday then the following
working day.
Last trading day Last calendar day of the contract expiry month. If last calendar day is a holiday
then the preceding working day.
TRADING
Trading period Mondays through Fridays
MCX reaches Trading session Monday to Friday: 10.00 a.m. to 5.00 p.m.
Trading unit 360 kg - 2 drums
out to over Quotation/ Base value 1 kg
Price quote Ex - Chandausi, District Moradabad, Uttar Pradesh (Inclusive o Mandi Tax, but
1,900 cities exclusive of all taxes, purchase taxi sales tax/ VAT, if applicable and levies)
and towns in Maximum order size 18000 kg (100 drums)
Tick size 10 paise (Minimum Price Movement)
India through Daily price limits The base price limit will be 4%. The daily price limits shall be relaxed in
accordance with the provision of circular no. MCXIT&S/004/ 2015 dated
4,80,000+ January 5, 2015.
trading terminals Initial margin Minimum 5% or based on SPAN whichever is higher
(including CTCL) Additional and/ or In case of additional volatility, an additional margin (on both buy & sell side)
Special Margin and/or special margin (on either buy or sell side) at such percentage, as
(FY 2014-15)
deemed fit, will be imposed in respect of all outstanding positions.
Maximum allowable For individual clients: 500 MT or 5% of the market wide open position,
open position* whichever is higher
For a member collectively for all clients: 5000 MT or 20% of the market wide
open position, whichever is higher.
Near Month Limits
For individual clients: 250 MT or 5% of the market wide open position,
whichever is higher
For a member collectively for all clients: 2500 MT or 20% of the market wide
open position whichever is higher
DELIVERY
Delivery unit 360 kg/2 drums (with a tolerance limit of 1 % per drum) and direct multiples
thereof, though he will get the value only for the actually quantity delivered
by him.
Delivery period 25% Margin
Delivery centre(s) At Exchange designated warehouse at Chandausi
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 Additional delivery At exchange designated warehouse at Barabanki at discount of Rs. 2/-
centre (s) Per kg.
Quality specifications Natural Crude Mentha Oil (Arvensis) confirming to the following quality
specifications
• Appearance: Liquid • Odour: Strong minty with Herbal
• Colour: Light pale Yellow • Solubility: Soluble (1:4 to 6 vol. in 70% alcohol)
• Liquid Mentha Oil having L- Menthol 68% as per GLC test
– packed column (Assay by GLC)
» Above 68%: Premium of 1:1
» Between 63% - 68%: Discount 1:1
» Below 63%: Rejected
• Terpene
» Basis 7.5% » Between 7.5% - 9%: Discount 1:1 » Above 9%: Rejected
• Menthol Isomers: 6% (maximum)
• Menthyl Acetate: 6.5%
(maximum up to 6% without discount, 6% to 6.5% with 1:1 discount)
• Water and solid sediments: 0.65% (max.)
• Total Menthol contents (TMC): 70% - 79%
• Optical Rotation: -33° to -38° • Refractive Index: 1.42 - 1.48 (at 25°C)
• Fats and Oils: Negative • Menthofuran: Negative
• pH: It should be neutral • Congealing point: 21°C to 23 °C
• Identification: Confirm to BP/USP
• Specific gravity: 0.80 to 0.91 (at 25°C)
• High boilers: Nil
MCX is the first • GC temperature
» Detector temperature: 240° » Injector temperature: 240°
commodity » Oven temp.: Starting 80° » Temperature rise: 4° per minute
exchange in India • It should be free from any admixture such as edible oil, petroleum, mineral
oil, sediments, etc.
to launch mini • In order to check adulteration, water test, paper test and alkali test will
also be conducted, which should confirm to be negative.
futures contracts Packing Mentha oil for delivery would be accepted in brand new galvanized iron
container with minimum drum weight of 21 kg containing 180 kg of"
in various Mentha oil of specified quality. The cost of container, as fixed by the
Exchange, will be payable by the buyer.
commodities Due Date Rate The Due Date Rate (DDR) shall be arrived at by taking the simple average of
the last three trading days polled spot prices, viz., E–0, E–1, & E–2 (E- Expiry
date). In the event of the spot prices for any one of E–1 and E–2 not being
available the spot price of E–1 would be used for arriving at the average. In
case spot prices are not available for both E–1 and E–2, then the average of
E–0 and E–3 (two days) would be taken. If all the three days' prices, viz., E–1,
E–2 and E–3 are not available, then only one day's price, viz., E–0 will be taken
as the DDR.
For the purpose of computation of spot prices the following weightages is
assigned to the respective mandis: (*2% will be added to Barabanki price)
Mandis Weightage Mandis Weightage
Sambhal 25% Barabanki 30%*
Chandausi 15% Rampur 15%
Badayun 7.5% Bareli 7.5%
Delivery Logic Compulsory

www.mcxindia.com Note: Please refer to the exchange circulars for latest contract specifications
* Genuine hedgers having underlying exposure that exceed the prescribed OI limits given in the contract specifications can be allowed higher limits based
on approvals.

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221015

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While the exchange has made every effort to assure the accuracy, correctness and reliability of the information
contained herein, any affirmation of fact in the product leaflet shall not create an express or implied warranty Exchange Square, Suren Road, Chakala, Andheri (East)
that it is correct. This product leaflet is made available on the condition that errors or omissions shall not be Mumbai 400 093, Tel. no.: +91-22-6731 8888
made the basis for any claims, demands or cause of action. MCX shall also not be liable for any damage or loss of
any kind, howsoever caused as a result (direct or indirect) of the use of the information or data in this product Email id: info@mcxindia.com,Website: www.mcxindia.com
leaflet . CIN: L51909MH2002PLC135594