Commodity Trading Tips for Mentha Oil by KediaCommodity

Ajay Kumar Kedia 17 June 2014

Mentha-Oil Menthaoil settled down -1.79% at 769.2 driven by weak spot market demand. Further, higher supplies from producing regions also put pressure on mentha oil prices. Mentha oil harvesting is in full swing keeping the prices under pressure. Higher production is expected due to favourable weather conditions during the sowing and growth stages and also due to increase in acreage. The prices likely to continue to trade with weak trend on heavy supplies, overcoming the demand from local mandis and exporters. 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. Sources 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. Sources are expecting that the total exports is likely to reach in the range of 21000 to 21500 tonnes as most of exporters are showing strong buying participation at current levels with the anticipation of limited supplies in next marketing season. Technically market is under long liquidation as market has witnessed drop in open interest by -0.19% to settled at 4135, now Menthaoil is getting support at 760.6 and below same could see a test of 751.9 level, And resistance is now likely to be seen at 777.2, a move above could see prices testing 785.1.