Commodity Trading Tips for Mentha Oil by KediaCommodity

Ajay Kumar Kedia 17 May 2013

Mentha-Oil Menthaoil May contract dropped Rs 2.4 and settled at Rs 906.9 on late profit booking though downside was limited on the back of rising demand from the physical markets. Strong demand from the pharmaceutical industries and constrained supply in the domestic market further supported the uptrend. It is to be learnt that prices have been falling continuously for the commodity due to low demand and prospects of better production this year. But some short covering provided support to the falling prices. Expected higher new crop arrivals this month could prevent rates from shooting up a lot. Expected higher new crop arrivals this month also weighed on prices. High stocks from last year too could keep pressure on the prices. 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. New crop is delayed by 10-15 days, however mentha oil output may rise this year on higher crop. As per trade output may jump 20 percent to 55,000-60,000 tons during current year.In Rampur, mentha oil (68 GLC) quoted at Rs 1,042 per kg, in Chandausi Rs 1,055 per kg, in Sambhal at Rs 1,055 a kg, in Barabanki at Rs 1,020 a kg. On 15th May, total stock of mentha oil at MCX-monitored warehouses of Chandausi was 1, 23, 307 kg of which 1, 23, 307 kg was physical stock and demat stock was nil. At Barabanki, the total stock was 4, 53, 310 kg of which, physical stock accounted for 4, 53, 310. The contract made intraday low of Rs 902 a kg and high of Rs 921 a kg with the volume of 3109 and total open interest for the same contact was at 2294.Now support for the menthol is seen at 898.9 and below could see a test of 891. Resistance is now likely to be seen at 917.9, a move above could see prices testing 929.