Commodity Trading Tips for Mentha Oil by KediaCommodity

Ajay Kumar Kedia 12 September 2014

Menthaoil settled up 0.68% at 685.7 as demand picked up moderately at these lower levels. With rates having fallen a lot over last few months, traders are not ruling out some more recovery in the near term. Higher stocks could however limit the uptrend in the coming days as demand starts rising. At Sambhal market sources reported arrivals at 80 Drums(1-drum=180kg), unchanged as compared to previous day’s arrival. At Barabanki market estimated market supply was at 250 Drums(1-drum-180kg), steady as against previous day’s arrival. At Rampur market estimated market supply was at 15 Drums(1-drum=180kg), lower by 2 Drums(1-drum=180kg) as against previous day. At Bareilly market total arrivals are at 7 Drums(1-drum-180kg), up by 1 Drums(1-drum-180kg) from previous trading day. However, lower production in India is likely to decline by 20% due to lower plantings of the aromatic herb on falling prices in the past two years, capped some losses in mentha oil prices to some extent. Sources estimate the area under mentha planting at 17,500 hectares this season, 20 per cent down, resulting in a proportionate fall in mentha oil production this year. Production of synthetic mentha oil on a global level has increased, which has also caused demand to remain on the lower side. since last week prices where under pressure as speculators indulged in reducing positions amidst falling demand from consuming industries in the spot market. Technically market is under short covering as market has witnessed drop in open interest by -4.06% to settled at 8003 while prices up 4.6 rupee, now Menthaoil is getting support at 679.1 and below same could see a test of 672.4 level, And resistance is now likely to be seen at 691.4, a move above could see prices testing 697.