Menthaoil yesterday settled up 1.87% at 922 on short covering driven by pick up in industrial demand. Sentiment improved further due to restricted arrivals from major producing regions. Good demand from the International markets and the domestic pharmaceutical Industries, also have added to the spurt in the prices of the commodity. The total area under mentha crop is expected to increase this year as the commodity prices witnessed firm trend in the last year due to good demand from pharmaceutical industry. Recent heavy rain fall in Uttar Pradesh has adversely affected the crop and this may result in crop damage, according to the sources. Higher production estimates are also putting further pressure on the commodity movement. The area under mentha crop is expected to be higher at 2.10 lakh ha against last year's 1.75 lakh ha. 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. Technically market is under short covering as market has witnessed drop in open interest by -3.88% to settled at 3917 while prices up 16.9 rupee, now Menthaoil is getting support at 912.3 and below same could see a test of 902.5 level, And resistance is now likely to be seen at 928.4, a move above could see prices testing 934.7.

Trading Ideas:

Menthaoil trading range for the day is 902.8-935.

Menthaoil spot is at 1010/-. Spot market is up by Rs. 15/-.

Mentha oil ended with gains on short covering driven by pick up in industrial demand.

Sentiment improved further due to restricted arrivals from major producing regions.

Recent heavy rain fall in Uttar Pradesh has adversely affected the crop and this may result in crop damage