Mentha oil January contract dropped Rs 21.9 and settled at Rs 1187.4 a kg against our expectation but overall market look firm and rates can shoot up as demand is likely to rise in the mandis. Increased arrivals in the mandis have been there but a rise in winter season demand continued to support the prices. Expected rise in export and domestic demand from pharmaceutical Industries are likely to provide further support to the prices in the medium term. Reports of fall in production and a rise in demand at lower levels is expected though traders are not ruling out intermittent profit booking at higher levels before demand rises in the mandis again expected fall in production is likely to keep sentiments up for Mentha in the medium term. Rising export demand from China are expected to provide support to the prices in medium term, now support for the menthol is seen at 1176 and below could see a test of 1164.6. Resistance is now likely to be seen at 1205.9, a move above could see prices testing 1224.4.

Trading Ideas:

Mentha Oil trading range is 1164.7-1224.

Mentha oil spot is at 1280/-.Spot is down by Rs.15/-.

Mentha oil January contract dropped Rs 21.9 and settled at Rs 1187.4 a kg

Reports of fall in production and a rise in demand at lower levels

Mentha oil looks to take support at 1176 and resistance at 1205.9.

BUY MENTHOL JAN @ 1198-1205 SL 1175 1218-1234-1245.MCX (1WEEK)