OUTLOOK-Mentha oil seen up on demand recovery, exports

MUMBAI, Dec 1 (Reuters) - India mentha oil futures may extend gains this week tracking a firm spot market, where demand from domestic and overseas buyers has improved, analysts said on Monday.

Usually demand for mentha oil increases in winter, especially in November and December, due to its medicinal uses.

"Good demand is there from domestic buyers. Exporters were also showing interest," said Vandana Bharti, a senior analyst at SMC Comtrade.

In the last fortnight, export demand has risen significantly, said a trader from Chandausi in Uttar Pradesh, India's biggest mentha oil spot market.

At 4:28 p.m., the December mentha contract MMOZ8 on the Multi Commodity Exchange was up 1.25 percent at 527.60 rupees a kg, while in Chandausi the price was 575 rupees, up 12 rupees.

However, exports of mint products -- mentha oil, menthol and menthol crystals - dropped 15 percent to 11,500 tonnes in April-Oct, data from the Spices Board showed.

A weak rupee, which increases exporters' returns, also supported prices, said an analyst with Bonanza Commodity Brokers Pvt Ltd.

The November contract may derive support at 520 rupees and face resistance at 550 rupees, Bharti said.

Mentha oil is obtained by steam distillation of leaves and other parts of the mentha plant.