Commodity Trading Tips for Mentha Oil by KediaCommodity

Ajay Kumar Kedia 19 February 2014

Mentha-Oil Menthaoil settled down -1.15% at 766.3 as high stocks kept overall market sentiments weak. Favorable crop conditions, expectations of higher production from the major producing belts also weighed on prices. Limited availability in the physical market following lower arrivals from Chandausi in Uttar Pradesh limited the downside. Favorable crop conditions, expectations of higher production from the major producing belts also weighed on prices. 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. Traders mentioned that mentha oil production in the current year is likely to be around 60 thousand tonnes against the earlier estimates of 52-54 thousand tonnes. With Gujarat extending ban on Gutka for 1 more year, this could have a negative impact on Mentha Oil demand. Higher production and high stock levels prevent markets from recovering a lot. 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, Men-thol 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 fresh selling as market has witnessed gain in open interest by 2.23% to settled at 4732 while prices down -8.9 rupee, now Menthaoil is getting support at 760.1 and below same could see a test of 753.8 level, And resistance is now likely to be seen at 775.8, a move above could see prices testing 785.2.