Menthaoil settled up 0.29% at 831.8 on short covering after prices dropped on the back of strong carryover stocks in local mandies along with waning export demand of mentha oil. 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. Traders 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 will also be 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. The spot prices of the synthetic mentha oil are hovers around Rs 700-750 per kg against the spot rates of natural mentha oil of Rs 930-945 per kg. Sources estimated that the current year mentha oil production will be around 60 thousand tonnes against the earlier estimates of 52-54 thousand tonnes. Mentha oil Production this year expected higher at more than 60000 tons versus 50000 tons last year due to higher demand from pharmaceutical industries. Technically market is under short covering as market has witnessed drop in open interest by -5.1% to settled at 5212 while prices up 2.4 rupee, now Menthaoil is getting support at 825.6 and below same could see a test of 819.3 level, And resistance is now likely to be seen at 836.5, a move above could see prices testing 841.1.

Trading Ideas:

Menthaoil trading range for the day is 819.1-840.9.

Menthaoil spot is at 942/-. Spot market is up by Rs. 1/-.

Menthaoil dropped on short covering after prices dropped due to strong carryover stocks in local mandies along with waning export demand

Sources said that the total carryover stocks of around 26-28 thousand tonnes have been reported in the major producing states.

Technically market is under short covering as market has witnessed drop in open interest by -5.1% to settled at 5212