Menthaoil yesterday settled up 0.44% at 853.1 tracking firmness in spot demand amid short covering after prices dropped due to fresh supplies in local mandies along with strong production in the current year. Mentha oil production this year expected higher at more than 60000 tons against 50000 tons last year. 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. 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. Technically market is under short covering as market has witnessed drop in open interest by -7.45% to settled at 5255 while prices up 3.7 rupee, now Menthaoil is getting support at 840.3 and below same could see a test of 827.6 level, And resistance is now likely to be seen at 860.6, a move above could see prices testing 868.2.

Trading Ideas:

Menthaoil trading range for the day is 827-867.6.

Menthaoil spot is at 936/-. Spot market is down by Rs. 6/-.

Menthaoil gained tracking firmness in spot demand amid short covering after prices dropped due to fresh supplies in local mandies

Mentha oil production this year expected higher at more than 60000 tons against 50000 tons last year.

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