Commodity Trading Tips for Mentha Oil by KediaCommodity

Ajay Kumar Kedia 22 August 2014

Mentha-Oil Menthaoil settled down -1.06% at 698 due to sluggish demand from consuming industries in the spot market. Further, increased arrivals of the commodity in the physical market from the major producing belts in Uttar Pradesh too supported the downside in mentha oil prices. At Chandausi market sources reported arrivals at 15 Drums(1-drum-180kg), lower by 5 Drums(1-drum-180kg) from previous arrivals. At Sambhal market estimated market supply was at 60 Drums(1-drum=180kg), higher by 10 Drums(1-drum=180kg) as compared to previous day. At Barabanki market total arrivals are at 275 Drums(1-drum-180kg), unchanged as compared to previous arrival. At Rampur market arrivals were reported at 30 Drums(1-drum=180kg), steady as against previous arrival. Sources mentioned that mentha oil production in the current year is likely to be around 60 thousand tonnes against the earlier estimates of 52-54 thousand tonnes. The total stock position of mentha oil is currently reported at around 45-50 thousand tonnes against the average annual domestic demand of 32-33 thousand tonnes. Mentha oil Production this year expected higher at more than 60000 tons versus 50000 tons last year due to higher demand from pharmaceutical industries. The area under crop this year expected higher at 2.10 lakh hectares versus 1.75 lakh hectares last year. 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 -6.09% to settled at 7014 while prices down -7.5 rupee, now Menthaoil is getting support at 695.2 and below same could see a test of 692.5 level, And resistance is now likely to be seen at 702.2, a move above could see prices testing 706.5.