Commodity Trading Tips for Menthaoil by KediaCommodity

Ajay Kumar Kedia 15 January 2014

Menthaoil settled up 0.95% at 839.9 on the back of a rise in demand from consuming industries in the spot market against restricted supplies from Chandausi in Uttar Pradesh. However, comfortable carryover stocks, favorable crop conditions and expectations of higher production from major producing belts capped the gains in mentha oil prices. However, favorable crop conditions and higher production prospects capped the gains in mentha oil prices. Markets sources suggested that the total carryover stocks of around 26-28 thousand tonnes have been reported in the major producing states. These were well above the average monthly consumption of around 15-16 thousand months of the next six months. Sources estimated that the current year mentha oil production will be around 60 thousand tonnes against the earlier estimates of 52-54 thousand tonnes. The prices were also pressurized by waning offtake by natural mentha oil exporters. The sources suggested that steady supplies of synthetic mentha oil have reduced the demand of natural mentha oil in local mandies. 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. India's production of mentha oil may touch 60000 tons this year. Technically market is under short covering as market has witnessed drop in open interest by -3.19% to settled at 5979 while prices up 7.9 rupee, now Menthaoil is getting support at 831.8 and below same could see a test of 823.7 level, And resistance is now likely to be seen at 845, a move above could see prices testing 850.1.