Mint Market Update

Import & Export & Currency

Government announced MEIS benefit scheme will continue through December 31, 2020 with a limit on maximum withdrawal. Offers may increase for H1 2021. As investors have begun to invest in stock exchange, dollar inflow has increased resulting in appreciation of Indian ruppe. This trend is expected to continue for a while.

Harvesting

Oil availability is a bit poor as festival season is over. People expect oil availability to increase by early October. Freshly harvested oil from Konch/Jalaun and Chhatarpur areas will also begin to flow by end of September and will continue throughout the duration of November.  We expect to see between 3,500 MT – 4,000 MT, which will adversely impact the oil prices.

Manufacturing

Presently, manufacturing margin from oil to Menthol crystals is about INR 150/KG which has to increase to INR 200/KG for industries to sustain. Menthol demand is very poor and reason being is many of the large historical buyers have converted to synthetic option.

Demand & Pricing

Cis 3 Hexenol and DMO are in demand everywhere. People are converting DMO to Menthol in larger number because they are making money from Cis 3 Hexenol 98%. Currently DMO price is roughly 74.5% of oil price. Historically whenever DMO price would reach 76% of crude oil price, conversion would reduce with profit margins reducing as well.  However, this year is a different story, as conversion from DMO to Menthol is giving a profit of INR 150/KG. Cis 3 Hexenol is extracted while undergoing this process of conversion. It used to sell at INR 20,000/KG, but current price is more than INR 25,000/KG and people are buying Cis 3 Hexenol 98% even at $375/KG. This means DMO and its by-products prices will remain firm until Cis 3 Hexenol is no longer in demand. Please see Figure 1 below for year-to-date price trends.

Figure 1

Year-to-date mint market price trend graph