Commodity Trading Tips for Mentha Oil by KediaCommodity

Ajay Kumar Kedia 25 August 2014

Menthaoil settled down -0.69% at 693.2 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 Sambhal market estimated market supply was at 80 Drums(1-drum=180kg), higher by 20 Drums(1-drum=180kg) from previous trading day. At Barabanki market sources reported arrivals at 280 Drums(1-drum-180kg), up by 5 Drums(1-drum-180kg) as against previous day. At Bareilly market sources reported arrivals at 5 Drums(1-drum-180kg), steady as against previous day's arrival. At Chandausi market estimated market supply was at 20 Drums(1-drum-180kg), higher by 5 Drums(1-drum-180kg) from previous day's arrivals. At Rampur market arrivals were reported at 30 Drums(1-drum=180kg), unchanged as compared to previous day's 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. Technically market is under long liquidation as market has witnessed drop in open interest by -19.05% to settled at 5678, now Menthaoil is getting support at 690 and below same could see a test of 686.8 level, And resistance is now likely to be seen at 698, a move above could see prices testing 702.8.