Menthaoil settled down -2.82% at 803.7 amid weak demand against ample inventories, following higher supplies from producing regions at spot markets. Steady arrivals in the mandis for the new crop kept the trend weak. The arrivals will remain steady if the skies are clear. However, hopes of higher output from the major producing belts weighed on mentha oil prices. In Rampur total arrivals were at 80 Drums(1-drum=180kg), up by 80 Drums(1-drum=180kg) from previous trading day. In Sambhal estimated market supply was at 60 Drums(1-drum=180kg), steady as against previous day’s arrival. In Barabanki total arrivals were at 90 Drums(1-drum-180kg), steady as against previous day’s arrival. As per the market sources, the total sowing acreage of mentha oil is expected to decline by 20-25% in the current year on the account of delayed harvesting mustard and wheat crop in major areas of Uttar Pradesh and Punjab coupled with poor realization rate from mentha oil. Sources added that the total production of mentha oil in the current year is likely to be around 35-36 thousand tonnes against the previous year of 50 thousand tonnes. The prices were also supported by strong export demand in local mandies. Traders mentioned that the total exports of mentha oil for the full year April 1, 2013 to March 31,2014 are likely to surpass the previous record of 20,500 tonne , ie. reported in 2008. Technically market is under fresh selling as market has witnessed gain in open interest by 7.56% to settled at 4028, now Menthaoil is getting support at 794.4 and below same could see a test of 784.9 level, And resistance is now likely to be seen at 821.2, a move above could see prices testing 838.5.

Trading Ideas:

Menthaoil trading range for the day is 784.8-838.4.

Menthaoil spot is at 866/-. Spot market is down by Rs.16/-.

Mentha oil ended with losses amid weak demand against ample inventories, following higher supplies from producing regions.

Steady arrivals in the mandis for the new crop kept the trend weak.

Total production of mentha oil in the current year is likely to be around 35-36 thousand tonnes against the previous year of 50 thousand tonnes