Commodity Trading Tips for Menthaoil by KediaCommodity

Ajay Kumar Kedia 6 January 2014

Menthaoil settled down -1.33% at 829.3 on the account of comfortable carryover stocks along with limited offtake by use industries. Higher production prospects and reports of better sowing due to favorable crop conditions also weighed on prices. As per market sources, the total stock position of around 34-35 thousand tonnes of mentha oil has been reported in the major mandies. This can easily meet the average annual domestic demand of 32-33 thousand tonnes . Therefore, comfortable stocks has encouarged strong stockiest selling at every rise in both spot and futures market. The market sources also suggested that all the major pharmaceutical and food confectionery industries are already sitting with comfortable stocks in their warehouses. The total production of mentha oil is estimated around 54-55 thousand tonnes in the current year against 45 thousand tonnes of the last year. This is mainly due to the better price realization and favourable crop conditions. Mentha oil Production this year expected higher at more than 60000 tons versus 50000 tons last year due to higher demand from pharmaceutical industries. The area under crop this year expected higher at 2.10 lakh hectares versus 1.75 lakh hectares last year. The market picture for mentha oil looks weak as higher output and high stock levels put a stop on the markets from recovering in a big way. India's production of mentha oil may touch 60000 tons this year. Technically market is under fresh selling as market has witnessed gain in open interest by 3.27% to settled at 6405 while prices down -11.2 rupee, now Menthaoil is getting support at 824.4 and below same could see a test of 819.4 level, And resistance is now likely to be seen at 838.2, a move above could see prices testing 847.