Menthaoil on MCX settled down -0.23% at 992.9 because of fall in demand in the domestic spot market. Further, ample stocks position on higher supplies from producing belts of Chandausi in Uttar Pradesh, too influenced mentha oil prices. Production was lower due to un-favorable weather conditions during the crop’s harvesting period. Traders and stockists in major market of UP maintain that the near term price outlook will be bullish. This is because nearly 14500 MT of mint products were exported in six months of the current financial year. Hence mosttraders feel that exportdemand forthe complete financial year can be between27000 and 29000 MT Last year exports were reported lower at 23000 MT. Farmers are keeping most of the stocks in their hands and as per traders there is willingness amongst the industry persons to buy at prevailing rates. As most of the slocks are held with the farmers, purchases are easily made by the industry persons whenever requirement arises. Trade sources estimate that total area under Mentha planting has dropped by 20% to 1.75 lakh ha this season resulting into a proportionate fall in Mentha oil production this year. However, a pick up in sowing over last couple of weeks have ensured prices falling for the commodity, as low demand further pressurized market sentiments. Technically market is under fresh selling as market has witnessed gain in open interest by 1.13% to settled at 2598 while prices down -2.3 rupees, now Menthaoil is getting support at 988.1 and below same could see a test of 983.3 level, And resistance is now likely to be seen at 998.2, a move above could see prices testing 1003.5.

Trading Ideas:

# Menthaoil trading range for the day is 983.3-1003.5.

# Mentha oil spot at Sambhal closed at 1127.20 per 1kg. Spot prices was down by Rs.-7.20/-.

# Mentha oil prices dropped because of fall in demand in the domestic spot market.

# Further, ample stocks position on higher supplies from producing belts of Chandausi in Uttar Pradesh, too influenced mentha oil prices.

# Production was lower due to un-favorable weather conditions during the crop’s harvesting period.