Mentha oil prices ended with gains tracking a firm trend at spot markets on strong demand from consuming industries. Further, tight stocks position in the physical market following restricted arrivals from producing regions too supported the upside. But, the gains were capped by the hopes of higher output from the major producing belts. 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.

In Sambhal arrivals were reported at 125 Drums(1-drum=180kg), steady as against previous day’s arrival. In Chandausi arrivals were reported at 15 Drums(1-drum-180kg), higher by 10 Drums(1-drum-180kg) from previous trading day. In Bareilly estimated market supply was at 25 Drums(1-drum-180kg), steady as against previous day’s arrival. In Barabanki sources reported arrivals at 300 Drums(1-drum-180kg), unchanged as compared to previous day’s arrival. 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 , ie. reported in 2008.

Technically market is under short covering as market has witnessed drop in open interest by -0.43% to settled at 4884 while prices up 0.6 rupee, now Menthaoil is getting support at 710.2 and below same could see a test of 704.5 level, And resistance is now likely to be seen at 725.2, a move above could see prices testing 734.5.

Trading Ideas:

Menthaoil trading range for the day is 704.5-734.5.

Menthaoil spot is at 810/-. Spot market is up by Rs. 18/-.

Mentha oil prices ended with gains tracking a firm trend at spot markets on strong demand from consuming industries.

Further, tight stocks position in the physical market following restricted arrivals from producing regions too supported the upside.

Sources added that the total production of mentha oil in the current year is likely to be around 35-36 thousand tonnes.