BREAKING NEWS : Mentha oil prices rose 18% in 18 days amid lower production estimates.
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Mentha oil has surged 18% in just 18 days, hitting a 4-month peak due to reduced production projections. Anticipated robust winter demand from FMCG industries and consistent export inquiries, backed by a resilient economy, will further bolster its prices. Additionally, the export market could benefit from rupee depreciation. These factors collectively shape a promising outlook for mentha oil's market trajectory.
The years 2022–23 witnessed a significant decline in the production of mentha oil, with only 41937 MT produced compared to 48389 MT in the previous year. This led to an increased reliance on synthetic menthol, which impacted the price of mentha oil. Looking ahead to the years 2023–24, the production of mentha oil is expected to drop even further, down to 32259 MT. This represents a decline of over 23%, which is likely to lend further support to the prices of mentha oil. Additionally, the production of synthetic menthol is also expected to decline by about 20%, from 4193 MT to 3355 MT.
Overall, the low supply and production of mentha oil in recent years have had a significant impact on prices. As we look ahead to the coming year, it seems likely that this trend will continue, with prices remaining strong due to the ongoing supply constraints. Investors and traders in the mentha oil market should continue to monitor these trends closely to make informed decisions about their investments. The impact of these lower supplies can already be seen in the prices of mentha oil, which have risen to over Rs. 1000 after making a low of around Rs. 850. This bullish trend is expected to continue, as the carry-forward stock of mentha oil has also declined significantly. Last year, the carry-forward stock was 6693 MT, but this year it is expected to be only 246 MT. From a technical perspective, we can expect the market to rally to levels of Rs. 1140 and above shortly. This is due to the combination of low supply and declining production, which is driving up demand and prices for mentha oil.
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