Menthaoil October contract dropped Rs 30.4 and settled at Rs 1121.6 due to weak spot demand as prices continued to be pressurized by the recent ban on Gutka in some states. Better production prospects have been keeping overall sentiments weak. Production this year likely to exceed 50000 tonnes as per sources vs 38000 tonnes last year. Higher sowing activities due to the high rates obtained by farmers last year resulted in higher production this year. In Uttar Pradesh, the largest producer of Mentha Oil in India, the area has been forecast to rise to 2.10 lakh ha vs 1.75 lakh ha. Higher stocks in the mandis from higher arrivals also kept pressure on the market sentiments. However traders also expect the demand to rise over next few months once the prices stabilize at the lower levels as the arrivals get over. The total arrivals decreased to 400 drums from 500 drums over previous close. On 4th October, total stock of mentha oil at MCX-monitored warehouses at Chandausi was 1, 04, 632 kg of which 96, 716 kg was physical stock and demat stock was 7,916 kg. At Barabanki, the total stock was 19, 72, 579 kg of which, physical stock accounted for 16, 06, 770 and demat stock was 3, 65, 808 kg. The contract made intraday low of Rs 1112.5 a kg and high of Rs 1147.8 a kg with the volume of 6165 and total open interest for the same contact was at
4659. Now support for the menthol is seen at 1106.8 and below could see a test of 1092. Resistance is now likely to be seen at 1142.1, a move above could see prices testing 1162.6.

Trading Ideas:

Mentha oil trading range for the day is 1092-1162.6.

Menthaoil spot is at 1335/-.Spot market is up by Rs. 15/-.

Mentha oil ended lower due to weak spot demand as prices continued to be pressurized by the recent ban on Gutka

Better production prospects have been keeping overall sentiments weak.

On 4th October, total stock of mentha oil at MCX-monitored warehouses at Chandausi was 1, 04, 632 kg