Peppermint Bulletin - July 2008
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Monsoon Floods destroy crops in Uttar Pradesh
Earlier this year we reported an increase in the production of arvensis which we have would expected to help bring down the price of oil. However, in the recent weeks India have experienced very heavy rains which have resulted in severe damage to mature crops. The first downpour a couple of weeks ago rain accounted for a projected loss of 10% of the crop, which would not have not posed a problem in an already oversized crop, but after a short dry period the rains returned and we now expect 30% or more of the crop to be ruined. With crop laying in the field, rotting, we might expect to see poor quality oil carrying off-notes and the full force of these climatic conditions may not be felt until the oil comes onto the market.
While the arvensis crop was expected to be very large this year (45000 tonnes), the price is currently being determined more by sentiment and by the commodity exchanges in India rather than reflecting real losses of the crop. Currently, with the influence of speculators, prices have moved from a 500 to 850 rupees and we may see them approach 1000 rps before things calm down. Arvensis was our ray of light in a peppermint market which has seen USA piperita prices double in the last year, however, the higher prices for arvensis will undoubtedly be with us for some time. This latest development will make it increasingly difficult to offer cheaper alternatives in the coming year, consequently prices for new orders will have to reflect these current difficult market conditions. |
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| Last Updated: 19th-Aug-2008 13:04 |
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