Menthaoil July contract dropped Rs 4.8 and settled at Rs 1224.6 tracking weakness in spot demand. Demand is unlikely to rise much in the short term as traders wait for further dips before making queries in the mandis. According to spot market sources, the overall acreage is estimated to increase from 1.75 lakh ha to 2.1 lakh ha this year. The overall production of Mentha is expected to increase by 30% - 40% as compared to last year. Exports of Mentha during April 2011 to January 2012 witnessed a decline of 6% to 12,850 tonnes as compared to 13,550 tonnes in the same period last year. In Rampur, mentha oil (68 GLC) quoted at Rs 1,340 per kg, in Chandausi Rs 1,340 per kg, in Sambhal at Rs 1,340 a kg, in Barabanki at Rs 1,270 a kg. Total arrivals of mentha oil reported around 1,100 drums. On 3rd July total stock of mentha oil at MCX-monitored warehouses at Chandausi was 30,220 kg of which 18, 715 kg was physical stock and demat stock was 11, 505 kg. At Barabanki, the total stock was 4, 17, 747 kg of which, physical stock accounted for 3, 97,734 and demat stock was 20, 513 kg. The contract made intraday low of Rs 1212.5 a kg and high of Rs 1246 a kg with the volume of 4939 and total open interest for the same contact was at 4087.Now support for the menthol is seen at 1209.4 and below could see a test of 1194.2. Resistance is now likely to be seen at 1242.9, a move above could see prices testing 1261.2.

Trading Ideas:

Mentha oil trading range for the day is 1194.2-1261.2.

Menthaoil spot is at 1315/-.Spot market is down by Rs.10/-.

Menthaoil dropped tracking weakness in spot demand.

The overall acreage is estimated to increase from 1.75 lakh ha to 2.1 lakh ha this year.

Total arrivals of mentha oil reported around 1,100 drums.