Mentha oil output has witnessed a considerable surge in the past few years. The main reason behind it was increased output and high international demand of Menthol. According to trade figures, Mentha oil demand has increased to 20,000 tonnes in 2006-07 against 11,000-12,000 tonnes in 2004-05, whereas in the supply front, there has been an increase of 1,000 tonnes every year in Mentha oil production, starting from 1997. In 2005-06, the production stood at 18,000 tonnes, whereas in 2006-­07, it saw a significant rise, as the production increased to 22,000 tonnes.
According to trade estimates, the production is expected to be around 30,000 tonnes in 2007-08, as against 22,000 tonnes in the previous year. The domestic and export demand is expected to be around 20,000 tonnes. In addition to this, we expect a speculative demand of 5,000-6,000 tonnes this year, which will add to the overall demand of Mentha Oil. At present, India's total Mentha industry is around Rs. 1,100 -1,200 crores.
Though there is a steady demand for processed Menthol throughout the year, from various domestic industries for making cough syrups, balm, toothpastes, etc., export mostly takes place during winter season. The reason is that, during summer, menthol shipped in containers gets liquefied because of heat. That creates a problem. Such seasonality in supply and demand makes Mentha oil prices volatile.