Commodity Trading Tips for Mentha Oil by KediaCommodity

Ajay Kumar Kedia 16 July 2014

Mentha-Oil Menthaoil settled down -2.47% at 690.8 as traders booked profits after the recent gains and sluggish demand in spot markets. The commodity prices weakened further on the expectations of higher output from the major producing belts. In Bareilly estimated market supply was at 20 Drums(1-drum-180kg), lower by 5 Drums(1-drum-180kg) from previous trading day. In Sambhal total arrivals are at 50 Drums(1-drum=180kg), down by 30 Drums(1-drum=180kg) as against previous day. In Barabanki total arrivals are at 300 Drums(1-drum-180kg), unchanged as compared to previous day’s arrival. In Chandausi estimated market supply was at 20 Drums(1-drum-180kg), lower by 30 Drums(1-drum-180kg) from previous day’s arrivals. With arrivals too slowing down, traders are not ruling out more recovery for this commodity in the coming days. Any rains in growing areas in UP could perk up prices even further. As per the market sources, the total sowing acreage of mentha oil is expected to decline by 20-25% in the current year. 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. 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. Technically market is under long liquidation as market has witnessed drop in open interest by -6.54% to settled at 5472, now Menthaoil is getting support at 683.9 and below same could see a test of 675.6 level, And resistance is now likely to be seen at 704.2, a move above could see prices testing 716.2.