Menthaoil yesterday settled down -1.97% at 984.3 on improved demand and reduced arrival at lower levels. It is to be noted that lack of strong demand amidst higher stocks prevented any strong uptrend in rates. Short term some more dips are not ruled out but with the recent rains reportedly affecting the harvesting process, this could keep trend firm. As per market sources , rainfall in major mentha growing areas such as Rampur , Sambhal and Moradabad might lead to serious damage to the standing mentha crop. Moreover, this might also reduce the overall oil recovery from the crop. Besides the new arrivals, the strong production estimates also propelled some stockiest selling from higher levels. The total mentha oil production is expected to be in the range of 52000-55000 tonnes in the current year, up almost 10-12% from the last year. This is mainly due to the better price realization and favourable crop conditions. Moreover, the total opening stocks of Mentha oil are expected to reach 13000-15000 tonnes in the next year. This may also convene the sufficient supplies of mentha oil next year. Technically market is under fresh selling as market has witnessed gain in open interest by 7.54% to settled at 4023 while prices down -19.8 rupee, now Menthaoil is getting support at 973.40 and below same could see a test of 962.50 level, And resistance is now likely to be seen at 1002.50, a move above could see prices testing 1020.70.

Trading Ideas:

Menthaoil spot is at 1088/-. Spot market is down by Rs. 10/-.

Mentha oil dropped on improved demand and reduced arrival at lower levels.

Rainfall in major mentha growing areas such as Rampur , Sambhal and Moradabad might lead to serious damage to the standing mentha crop

Moreover, the total opening stocks of Mentha oil are expected to reach 13000-15000 tonnes in the next year

Higher arrivals of the new crop (~250-300 drums) in mandis from harvesting have been keeping pressure on the market sentiments.