presentation on mentha oil - karvy · pdf fileintroduction mentha scientific name : mentha...
TRANSCRIPT
Presentation on Mentha Oil
Presented By:Mr. Aurobinda PrasadResearch HeadKarvy Comtrade Ltd.
27 September 2011
Introduction
Mentha Scientific Name : mentha arvensis and commonly known as
Japanese mint or pudina
Varieties & their contribution in total mentha oil Production :
Japanese mint oil (Mentha arvensis)- 75%
Peppermint oil (Mentha pipertia) – 18%
Spearmint (Mentha spicata) – 7%
Mentha oil is obtained by steam distillation process of Mentha leaves
India is the largest producer & exporter of mentha oil in World
Crop Seasonality
IndiaCountry Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
India
Crop Cycle
Sowing : January- February
Flowering : March – Mid May
Harvesting : End of May – July
Cuttings: 2-3 cuttings in a season
SowingHarvesting
Mentha Oil is a winter crop and grown in Rabi season
Mentha Oil processing
Crude Mentha Oil
Terpenes
Isolated Components
Deterpenated Oil
Menthol (70%)
Flakes Crystals
Dementholised Oil (30%)
Rectified DMO
Deterpenation
Rectification
Sector wise Usage
Worldwide consumption of Mentha oil, by Industry (Base year 2007)
Industry % Usage
Oral Hygiene 28%
Pharmaceuticals 26.6%
Tobacco 25.3%
Confectionaries 11%
Shaving Product 7%
Miscellaneous 2.1%
Sources: www.leffingwell.com
Global Scenario
World’s total Production generally hovers in the range of 35000-45000 tonnes
Largest producer & Consumer : India
India75%
China18%
Others7%
Share in Total Production Share in Total Consumption
India39%
China26%
Europe14%
USA13%
Others8%
Indian Scenario
India is the largest producer and consumer of mentha oil in world
Uttar Pradesh is the largest mentha producing state in India
UP95%
Punjab4%
Others1%
State wise share in total Production
State Districts
UP
Barabanki
Moradabad
Rampur
Bareilly
Punjab
Ludhiana
Jalandhar
Moga
Navasaher
Major Producing Districts
Indian Mentha Oil Production Trend
Est.
Source: Spices Board Of India & Trade Estimates
0
5000
10000
15000
20000
25000
30000
35000
40000
450001
99
6
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
*
Indian Foreign Trade of Mentha Oil
CHINA31%
U.S.A24%
SINGAPORE12%
GERMANY8%
U.K3%
BRAZIL3%
JAPAN3%
NETHERLANDS4%
Others12%
Indian Mint Product Export Destinations
YearQuantity (Tonnes) Value (Rs.)
2000-01 4185 15498.22
2001-02 11295 48474.34
2002-03 13589 56557.94
2003-04 10110 37991.76
2004-05 11143 50218.7
2005-06 14544 81320.66
2006-07 17642 110095
2007-08 21100 128050
2008-09 20500 142025
2009-10 19000 118972
2010-11 17450 169679Source: Spices Board Of India
Indian Mint Products Export Trend
Mint Products Exports from Indian (Tonnes)
Source: Spices Board Of India
Product 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11
Peppermint Oil 2472 2803.4 3352.9 4493.1 2856.2 3449.1
Spearmint Oil 146 291.6 348.8 262.2 91.3 220.3
Other Mint Oil 2381 3437 4110.7 5159.6 4229.5 3209.1
Menthol Crystal 1235 3552.6 4248.9 3973.9 4728 3331.5
Menthol 8311 7557.5 9038.8 6611.3 7095 7361.4
TOTAL 14544 17642 21100 20500 19000 17450
Mentha Oil Price Seasonal Index
90
95
100
105
110
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Price seasonal index has been derived from last 6 year mentha oil spot prices
Mentha Oil Balance Sheet (Tonnes) : India
Note :Assuming Indian production is 75% of world’s total ProductionAssuming Indian consumption is between 30-40% of world’s total Consumption
*Indian production is 40,000 tonnes in 2011 and exports will be 20,000 tonnes astargeted by Spices Board of India•CF : Carry Forward Stocks
YearTotal Supply Total Demand
Production Consumption Exports Derived CF
2006 20500 10660 (±3000) 17642 -7802
2007 27600 14352 (±3000) 21100 -7852
2008 35000 18200 (±3000) 20500 -3700
2009 35000 18200 (±3000) 19000 -2200
2010 25000 13000 (±3000) 17450 -5450
2011* 40000 26250 (±3000) 20000 -6250
Fundamental Analysis
Near Term: Bullish
Rising demand from confectionery on upcoming festive season
Demand from pharmaceutical industry is also expected to remain higher in coming
months ahead of winter season
Chinese mentha crop had been damaged this year by 40-50% due unfavorable
weather conditions during growth stage
Export to China is likely to remain higher as it is the largest importer of Indian mint
product
Stockiest are hoarding their stocks in anticipation of further rise in prices
Fundamental Analysis
Medium - Long Term: Bearish
Next sowing season : January– February
Present hike in prices might provoke farmers to increase acreage under mentha crop
Production estimates will come into the market in January which might create
pressure on prices
Export demand might also cool down
Technical Analysis
Since 2005 until September 2011: Price growth: 302 per cent
YoY gain/loss: 50 to 60 per cent
Performance of 2011 till date: 15% growth from previous year close
Probable targets for remaining this year Rs. 1390-1480 ( Until December 2011)
Intermediate movements: Rs. 1250-1370 ( 30-50 days view)
Buying is still suggested on corrections near Rs. 1250-1280
Technical Analysis
Long term view/call (3-6 months)
Sell in the range of Rs. 1450/60 to 1500 targets: Rs. 1200 then Rs. 1000 with
stop loss above Rs. 1670 ( Applicable for October & November contracts of MCX)
December contract can also be used for selling at the mentioned levels, only after
the contract accessibility
Statistical Analysis
The parabolic move can lift the price till Rs.1400 to 1550, according to the 3rd degree PolynomialequationThereafter, correction can take place which can be more than 1/2 of the vertical distance. Thedownside is however expected to be limited till the parabolic line (white) of Rs.1150 or the baseline of Rs.950
Disclaimer
The report contains the opinions of the author that are not to be construed as investment advice. Theauthor, directors and other employees of Karvy, and its affiliates, cannot be held responsible for theaccuracy of the information presented herein or for the results of the positions taken based on theopinions expressed above. The above-mentioned opinions are based on the information which isbelieved to be accurate and no assurance can be given for the accuracy of this information. There is riskof loss in trading in derivatives. The author, directors and other employees of Karvy and its affiliatescannot be held responsible for any losses in trading.Commodity derivatives trading involve substantial risk. The valuation of the underlying may fluctuate,and as a result, clients may lose their entire original investment. In no event should the content of thisresearch report be construed as an express or an implied promise, guarantee or implication by, or from,Karvy Comtrade that you will profit or that losses can, or will be, limited in any manner whatsoever.Past results are no indication of future performance. The information provided in this report isintended solely for informative purposes and is obtained from sources believed to be reliable.Information is in no way guaranteed. No guarantee of any kind is implied or possible where projectionsof future conditions are attempted.We do not offer any sort of portfolio advisory, portfolio management, or investment advisory services.The reports are only for information purposes and not to be construed as investment advice.For a detailed disclaimer please go to following URLS:
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