Menthaoil May contract dropped Rs 40 and settled at Rs 960.8 tracking weakness in spot demand as new crop arrivals started. Sources said that crop output may jump this year by 20 percent to 55,000-60,000 tons. Sentiments weakened further due to adequate stocks position following increased arrivals from Chandousi in Uttar Pradesh. 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. 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. In Rampur, mentha oil (68 GLC) quoted at Rs 1,060 per kg, in Chandausi Rs 1,080 per kg, in Sambhal at Rs 1,080 a kg, in Barabanki at Rs 1,045 a kg. 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, 52, 231 kg of which, physical stock accounted for 4, 52, 231. The contract made intraday low of Rs 960.8 a kg and high of Rs 1040.8 a kg with the volume of 6549 and total open interest for the same contact was at 953.Now support for the menthol is seen at 934.1 and below could see a test of 907.5. Resistance is now likely to be seen at 1014.1, a move above could see prices testing 1067.5.

Trading Ideas:

Mentha oil trading range for the day is 907.5-1067.5.

Menthaoil spot is at 1075/-. Spot market is down by Rs.30/-.

Mentha oil ended with losses tracking weakness in spot demand as new crop arrivals started.

Crop output may jump this year by 20 percent to 55,000-60,000 tons.

Sentiments weakened further due to adequate stocks position following increased arrivals from Chandousi in Uttar Pradesh