Menthaoil settled up 0.76% at 773.4 as stockists and speculators created fresh positions citing lower prices in expectations of a rise in demand in the coming time. However, favorable crop conditions, expectations of higher production from the major producing belts, capped the gains to some extent. Markets sources suggested that the total carryover stocks of around 26-28 thousand tonnes have been reported in the major producing states. These were well above the average monthly consumption of around 15-16 thousand months of the next six months. The mentha oil production in the current year is likely to be around 60 thousand tonnes against the earlier estimates of 52-54 thousand tonnes. Higher production and high stock levels prevent markets from recovering a lot. Short term sentiments continued to remain volatile and any uptrend may be limited. However traders feel present rates are low and this could support the short term market sentiments with demand gradually rising. Production this year expected higher at more than 60000 tonnes vs ~50000 tonnes last year. Latest reports from Spice Board indicate that for the period April-November last year, exports for Mint value-added products like Oil, Menthol and its crystals rose 129% in volumes at 15,850 and 62% in value at Rs 1975 Cr w.r.t. same period the previous year. Technically market is under short covering as market has witnessed drop in open interest by -9.98% to settled at 4629 while prices up 5.8 rupee, now Menthaoil is getting support at 761.8 and below same could see a test of 750.1 level, And resistance is now likely to be seen at 783.5, a move above could see prices testing 793.5.

Trading Ideas:

Menthaoil trading range for the day is 750.7-794.1.

Menthaoil spot is at 876/-. Spot market is up by Rs.6/-

Mentha oil gained as stockists and speculators created fresh positions citing lower prices in expectations of a rise in demand.

However, favorable crop conditions, expectations of higher production from the major producing belts, capped the gains.

The mentha oil production in the current year is likely to be around 60 thousand tonnes against the earlier estimates of 52-54 thousand tonnes