Commodity Trading Tips for Mentha oil by Kedia Commodity

Ajay Kumar Kedia 12 December 2014

Mentha oil settled up by 1.14% at 716.6 driven by firm demand from consuming industries in the spot market. Further, tight supplies in the physical market following restricted arrivals from Chandausi in Uttar Pradesh too fuelled the uptrend. At Bareilly market estimated market supply was at 2 Drums(1-drum-180kg), unchanged as compared to previous day's arrival. At Sambhal market sources reported arrivals at 40 Drums(1-drum=180kg), down by 20 Drums(1-drum=180kg) as against previous day. At Barabanki market sources reported arrivals at 60 Drums(1-drum-180kg), down by 40 Drums(1-drum-180kg) as compared to previous day. At Rampur market total arrivals are at 6 Drums(1-drum=180kg), unchanged as compared to previous day's arrival. Mentha oil production is expected to fall this year by 30 per cent to 40,000 tonnes from 55,000 tonnes a year ago, with acreage under the commodity declining as farmers sentiment were dampened due to lower prices. Mentha oil arrivals to the spot market, especially from the Chandausi in Uttar Pradesh, have increased substantially. The resulting fall in prices was capped due to lower production of the commodity this season. Acreage is expected to fall by 20 per cent this year, to 17,500 hectare on the back of a large carry-over stock from last year, which also had an impact on prices. However, export demand for the spice is expected to go up in the coming weeks. Technically market is under short covering as market has witnessed drop in open interest by -2.76% to settled at 7508 while prices up 8.1 rupee, now Menthaoil is getting support at 709 and below same could see a test of 701.4 level, And resistance is now likely to be seen at 721, a move above could see prices testing 725.4.