Mentha oil on MCX settled down by -0.57% at 988.8 on speculation that the area under cultivation can increase this year resulting good production. However downside seen limited amid tight stocks position on restricted supplies from producing belts. Total production of mentha oil during the current season is 32,000-34,000 tonnes against preliminary estimates of around 40,000 tonnes. Unfavourable weather conditions during harvesting period led to the drop in production. On the demand side, the seasonal demand emerges during winter season, especially from the pharma sector. Sources mentioned that nearly 14500 MT of mint products were exported in six months of the current financial year. This implies that export demand for the complete financial year can be between 27000 and 29000 MT quite cheaper, versus 23000 of total exports last year. Farmers are keeping most of the stocks in their hands. Most buyers are willing to buy at these levels. Since farmers are keeping most of stocks, thus whenever requirement arises, industry people will be purchasing from the farmers. This will be another bullish price driver. Indian markets had reported higher sowing for current year. 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. Mentha oil spot at Sambhal closed at 1133.30 per 1kg. Spot prices was up by Rs.7.80/-.Technically market is under long liquidation as market has witnessed drop in open interest by -1.56% to settled at 2265 while prices down -5.7 rupees, now Menthaoil is getting support at 981.4 and below same could see a test of 974 level, And resistance is now likely to be seen at 1000.5, a move above could see prices testing 1012.2.

Trading Ideas:

Menthaoil trading range for the day is 974-1012.2.

Mentha oil spot at Sambhal closed at 1133.30 per 1kg. Spot prices was up by Rs.7.80/-.

Mentha oil prices dropped on speculation that the area under cultivation can increase this year resulting good production.

However downside seen limited amid tight stocks position on restricted supplies from producing belts.

Sources mentioned that nearly 14500 MT of mint products were exported in six months of the current financial year.