Menthaoil settled up 1.65% at 780.7 in expectations of increase in demand for the ongoing marriage season. However, strong carryover stocks in local mandies along with waning export demand capped some gains in menthe 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 mentioned that mentha oil production in the current year is likely to be around 60 thousand tonnes against the earlier estimates of 52-54 thousand tonnes. The prices 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. Higher production and high stock levels prevent markets from recovering a lot. Short term sentiments continued to remain volatile and any uptrend may be limited. Production this year expected higher at more than 60000 tonnes vs ~50000 tonnes last year. Latest reports from Spice Board indicate that for the period April-November last year, exports for Mint value-added products like Oil, Menthol and its crystals rose 129% in volumes at 15,850 and 62% in value at Rs 1975 Cr w. r. t. same period the previous year. Technically market is under short covering as market has witnessed drop in open interest by -7.1% to settled at 4396 while prices up 12.7 rupee, now Menthaoil is getting support at 769.9 and below same could see a test of 759.1 level, And resistance is now likely to be seen at 786.1, a move above could see prices testing 791.5.

Trading Ideas:

Menthaoil trading range for the day is 758.5-790.9.

Menthaoil spot is at 885/-. Spot market is up by Rs. 11/-

Mentha oil ended with gains in expectations of increase in demand for the ongoing marriage season.

However, strong carryover stocks in local mandies along with waning export demand capped some gains in menthe oil prices.

Sources mentioned that mentha oil production in the current year is likely to be around 60 thousand tonnes