Menthaoil settled up 1.24% at 805.1 due to strong demand at spot markets from consuming industries. Further, restricted arrivals from Chandausi in Uttar Pradesh and expectation of weak sowing progress in local mandies too supported mentha oil prices. In Rampur arrivals were reported at 70 Drums (1-drum=180kg), lower by 10 Drums(1-drum=180kg) as against previous day. In Sambhal arrivals were at 80 Drums (1-drum=180kg), unchanged as compared to previous day’s arrival. In Barabanki 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 will also be well 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 short covering as market has witnessed drop in open interest by -2.12% to settled at 4071, now Menthaoil is getting support at 793.5 and below same could see a test of 783.3 level, And resistance is now likely to be seen at 811.9, a move above could see prices testing 820.1.

Trading Ideas:

Menthaoil trading range for the day is 783.8-820.6.

Menthaoil spot is at 865/-. Spot market is up by Rs.8/-.

Mentha oil ended with gains due to strong demand at spot markets from consuming industries.

Further, restricted arrivals from Chandausi in Uttar Pradesh and expectation of weak sowing progress in local mandies too supported prices.

In Barabanki arrivals were at 90 Drums(1-drum-180kg), steady as against previous day’s arrival.