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Tuesday, April 17, 2007

This document is for private circulation, and must be read in conjunction with the disclaimer on the last page.

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, J apan, UK, USA, etc. these varieties include the J apanese mint oil (derived

from Mentha Arvensis), peppermint oil (Mentha Piperita), dementholised J apanese 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. J apanese 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 J apan so it is also called J apani Mint than extant inBrazil, China and Formosa etc. Col. Mr. R.N. Chopra &

Dr. I.N. Chopra of Regional Reserch Laboratory J ammu

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 successfullygrown 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 J ammu,

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 Potato MenthaPaddy Potato MenthaBasil Potato Mentha

Paddy Lahi MenthaPaddy Wheat Mentha

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SeasonalityTime of Plantation

(Crop)Time of Plantation No. of

HarvestOil Yield Per Acre

Mentha Arvensis January 2nd wek to Feb. Last 2 60kgs to 90kgs

Mentha Piperita Dec. Last week to Jan. Last 2 40kgs to 60kgs

Mentha Spearmit Dec. Last week to Jan. Last 2 40kgs to 65kgs

Year wise cultivation & production ofMentha Oil

Year Area Heqtor Production ofMentha Oil

1965 65-70 21970 600-650 461975 4000-4500 2601980 8000 5001981 10000 8001985 18000 14001988 25000 22001990 35000 50001992 38000 54001995 45000 7000

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1996 35000 55001997 55000 110001999 62000 120002001 65000 130002003 72000 150002004 70000 140002005 - 18000-20000*

*- Industry Projections

Present DemandDomestic (India) 4000-4500 MT.Export (Overseas) 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, J apan, UK, USA, etc. these varieties include the J apanese mint oil (derived

from Mentha Arvensis), peppermint oil (Mentha Piperita), dementholised J apanese 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 Indiaimpressively 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 J anuary 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 J ammu 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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This document is forprivate circulation and mustbe read inconjunction with the disclaimeronthe lastpage

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