Mentha Oil


  • Mentha is an aromatic herb, which also goes by the name Japanese pudina in India. Steam distillation and filtration of dried Mentha arvensis leaves produces mentha oil, which can be processed to yield menthol and other derivatives. Mentha oil and its derivatives are extensively used in food, pharmaceutical, perfumery, and flavouring industry.
  • Mentha arvensis was first introduced in India between 1958 and 1964 by the Regional Research Laboratory, Jammu Tawi. In the 1980s, new strains were introduced by the Central Institute of Medicinal and Aromatic Plants (CIMAP) that gave improved oil yields. By 1996, India was producing 6000 tonnes of mentha oil and surpassed 45,000 tonnes in 2013, according to trade sources. Much of the increase in mentha oil production, particularly its exports, came in after 2004, after the introduction of futures contracts based on mentha oil as the underlying. India is the largest producer and exporter of mentha oil and its derivatives.
  • Mentha oil prices have always been quite volatile. In the last few years, India has emerged as an export hub for mentha oil and its derivatives, exposing exporters to high price volatility. Due to the presence of a liquid futures contract on MCX, the value chain participants are able to hedge this price risk on the MCX platform.

Factors Influencing the Market

International factors
  • Import demand from major importing countries such as China, the U.S., and Singapore.
  • USD–INR rate, the commodity being export-oriented.
  • Price of synthetic mentha oil in international market.
Domestic factors
  • 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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