Menthaoil yesterday settled down -3.12% at 850.9 due to fresh supplies in local mandies along with strong production in the current year. The total area under mentha crop is expected to increase this year as the commodity prices witnessed firm trend in the last year due to good demand from pharmaceutical industry. Higher production estimates are also putting further pressure on the commodity movement. The area under mentha crop is expected to be higher at 2.10 lakh ha against last year's 1.75 lakh ha. As per the market data, the fresh arrivals of around 1500-2000 kgs of new menthe oil is coming in the major mandies of Chandausi. Moreover, weak demand by exporters also added some selling in the mentha oil market. The concerns of shift in production trend from natural mentha oil to synthetic mentha oil in international market might discourage the export demand of mentha oil in the coming months. Besides the new arrivals, the strong production estimates also propelled some stockiest selling from higher levels. The total mentha oil production is expected to be in the range of 52000-55000 tonnes in the current year, up almost 10-12% from the last year. This is mainly due to the better price realization and favourable crop conditions. Moreover, the total opening stocks of Mentha oil are expected to reach 13000-15000 tonnes in the next year. This may also convene the sufficient supplies of mentha oil next year. Technically market is under long liquidation as market has witnessed drop in open interest by -1.59% to settled at 5678 while prices down -27.4 rupee, now Menthaoil is getting support at 833.8 and below same could see a test of 816.7 level, And resistance is now likely to be seen at 878.5, a move above could see prices testing 906.1.
Trading Ideas:
Menthaoil trading range for the day is 816.2-905.6.
Menthaoil spot is at 942/-. Spot market is down by Rs. 18/-.
Menthe oil dropped due to fresh supplies in local mandies along with strong production in the current year.
Higher production estimates are also putting further pressure on the commodity movement.
Technically market is under long liquidation as market has witnessed drop in open interest by -1.59% to settled at 5678
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