Menthaoil on MCX settled up 2.46% at 904.7 due to rising demand of the commodity in the spot markets with reports of lower arrivals further aiding the positive sentiment. Further, tight stocks position on restricted supplies from producing regions, too supported mentha oil prices. China and Japan have reduced their buying quantity in the recent past due to the economic slowdown had impacted Mint product's exports which declined substantially from the export basket by 18% in terms of volume and 4% in terms of value year-on-year. Exports of mint products stood at 21,150 tonne in FY16 valued at RS. 2,577.59 crore against 25,750 tonne valued at RS. 2,689.25 crore in FY15. Initially, India's mentha oil output was estimated to remain lower this year from 32,000 tonnes produced during last year. But, rainfalls later improved overall scenario that got worsened with scorching heat waves in May. Hence, overall mentha oil output for 2016-17 is now revised upwards at 32,000 tonnes. At Barabanki market sourcesreported arrivals at 350 Drums(1-drum-180kg), unchanged as compared to previous day's arrival. At Sambhal market arrivals were reported at 125 Drums(1-drum=180kg), steady as against previous day's arrival. At Rampur market arrivals were reported at 6 Drums(1-drum=180kg), higher by 1 Drums(1-drum=180kg) from previous trading day. Currently, mentha crop is been harvested and reports of heavy rainfall in the major growing areas in Uttar Pradesh affected arrivals resulting into fear of crop damage for October harvest. Technically market is under short covering as market has witnessed drop in open interest by -8.3% to settled at 3711 while prices up 21.7 rupee, now Menthaoil is getting support at 890.1 and below same could see a test of 875.6 level, And resistance is now likely to be seen at 913, a move above could see prices testing 921.4.

Trading Ideas:

Menthaoil trading range for the day is 875.6-921.4.

Mentha oil spot at Sambhal closed at 1042.20 per 1kg. Spot prices is up by Rs.18.20/-.

Mentha oil gained due to rising demand of the commodity in the spot markets with reports of lower arrivals further aiding the positive sentiment.

Further, tight stocks position on restricted supplies from producing regions, too supported mentha oil prices.

India's mentha oil output was estimated to remain lower this year from 32,000 tonnes produced during last year.