Peppermint Bulletin - May 2009
Peppermint Bulletin May 2009
The US market is very quiet and in these circumstances we might expect prices to fall from their current very high levels. Unfortunately growers have secured long term contracts based on these high prices with 65% or more of the 2009 and 2010 already sold. The result being the growers believe thay can afford to wait out a quiet or weakening market and restrict the flow of lower priced oil. Unfortunately for them, formulators have removed significant amounts of the US origin oil from their products and turned to cheaper alternatives such as Indian and demand is likely to reduce, at some point we feel the growers and buyers will have to agree a new price level.
In India the distillation of mentha piperita is in full swing and it is predicted that the crop size will be in excess of 1000 tonnes. With the economic situation being so uncertain in Europe and the USA, buyers have been reluctant to place contracts resulting in prices falling substantially from 2008. The earliest first cutting material has produced oil with very low menthofuran contents in some cases less than 1%, but these will increase as more mature plants are harvested.
Another large crop of mentha arvensis is similarly predicted (in excess of 30000 tonnes crude oil) and again prices have eased at the local level (in Rupees). Unfortunately the weak dollar has disguised some of this reduction in price with the $:Rp moving around 5%.
It is difficult to be sure where the Indian markets will go in the coming months, we must balance the high level of production and weak demand against the possibility that buyers reducing their stocks may come back into the market in force. However, so long as there are no adverse weather conditions, we expect piperita prices to fall a little further in the coming weeks but to rise again later in the year and arvensis to remain steady until Q4.
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| Last Updated: 26th-Jun-2009 12:25 |
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FD Copeland & Sons Ltd.
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