Mint exports dip 28% on weak US, Europe demand

Exports of mint products have come down in the first quarter due to weak demand from US and Europe, traders said. Demand for products made from mint oil and menthol has come down due to the economic slowdown. Leading buyers are consuming in smaller lots and waiting for the market to ease before picking up substantial volumes, Aravind Nanda, a prominent trader and member of Essential Oils Association of India (EOAI) told FE.

"Indian production is very good for 2009 and the spot price is unrealistic. It has to come down.Buyers are waiting for it come down before committing larger volumes," he added. Reports indicate the production for the 2009 season would be around 22,000 tonne and that the carry-over stock from the previous season would exceed 5,000 tonne.

Spices Board sources said that demand from China has come down in the last one year due to lower demand for the end -products made from mint oil. Exports during the first three months has come down by 28% in volume and 16% in value when compared to the corresponding quarter last year.

It is estimated that more than 77,000 hectares is under mint cultivation in India with more than 90% of the production coming in from Uttar Pradesh. Some estimates put the area under cultivation as 1.6 lakh hectares. Prices have more than doubled after mentha oil began trading in the exchanges, traders said.

"The arrival of futures market has destroyed the natural cycle of mint farming. The price discovery is not correct," Nanda said. Nanda expects the European market to rebound soon and the US market to remain weak for some time more.

According to the state-run Spices Board, India is one of the world's largest producers of mentha oil and exports nearly 80% of its produce.

Spices Board said that the bulk of the export is in the form of crystallised menthol. China is a major importer of the crystallised form and re-exports it after value-addition. Mentha oil is derived from a plant named Mentha arvensis or common mint. Mentha is primarily grown in Sambhal, Chandausi, Barabanki, Bedayun, Ram Nagar, and Bareily all in Uttar Pradesh.