Menthaoil yesterday settled up 0.55% at 902.7 on late short covering after prices seen pressure due to fresh supplies in local mandies along with strong production in the current year. As per the market data, the fresh arrivals of around 950-1000 drums of new mentha oil is coming in the major mandies of Chandausi with the price range of Rs 950-990 per kg. Besides the new arrivals, the strong production estimates might also encourage some stockiest selling from higher levels. As per latest data, 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 estimated at 13000-15000 tonnes for the current year. This may encourage stockiest liquidation at high levels. Production this year expected higher at more than 60,000 tons against 50,000 tons last year. Higher stock levels could pressurize prices in medium term. Heavy rains over last few days in UP have adversely affected the harvesting and could also lead to crop damage may impact prices. Technically market is under fresh buying as market has witnessed gain in open interest by 4.64% to settled at 5143 while prices up 4.9 rupee, now Menthaoil is getting support at 887.8 and below same could see a test of 872.9 level, And resistance is now likely to be seen at 911.6, a move above could see prices testing 920.5.

Trading Ideas:

Menthaoil trading range for the day is 872.8-920.4.

Menthaoil spot is at 960/-. Spot market is up by Rs. 4/-.

Menthaoil settled up on late short covering after prices seen pressure due to fresh supplies in local mandies

The fresh arrivals of around 950-1000 drums of new mentha oil is coming in the major mandies

The strong production estimates might also encourage some stockiest selling from higher levels.