Menthaoil settled down -0.55% at 710.9 amidst sluggish demand from consuming industries in the spot markets. Further, ample inventories in the physical market following increased arrivals from the major producing belts too added pressure on mentha oil prices. In Sambhal total arrivals are at 50 Drums(1-drum=180kg), down by 10 Drums(1-drum=180kg) from previous day's arrivals. In Rampur estimated market supply was at 20 Drums(1-drum=180kg), lower by 5 Drums(1-drum=180kg) from previous day's arrivals.

In Barabanki estimated market supply was at 350 Drums(1-drum-180kg), unchanged as compared to previous day's arrival. In Bareilly estimated market supply was at 20 Drums(1-drum-180kg), steady as against previous day's arrival. Since last week prices where under pressure after the update that Maharashtra Food and Drug Administration (FDA) extended for one more year the ban on manufacturing, sale and possession of tobacco and all types of processed and packaged tobacco products in the state, including gutka, pan masala and scented supari.

This will be the third consecutive year of the ban. India exports around 25 to 30,000 tons in a range of forms, with the balance of production used domestically. Mint product export rose by 68% to Rs 792 crore for half-year ended September 30, 2013, exporters feel it is unlikely to be sustained for the rest of the year as prices have dropped. Technically market is under fresh selling as market has witnessed gain in open interest by 4.99% to settled at 8749 while prices down -3.9 rupee, now Menthaoil is getting support at 704 and below same could see a test of 697.1 level, And resistance is now likely to be seen at 720.3, a move above could see prices testing 729.7.

Trading Ideas:

Menthaoil trading range for the day is 697.1-729.7.

Menthaoil spot is at 780/-. Spot market is up by Rs. 5/-.

Mentha oil prices dropped amidst sluggish demand from consuming industries in the spot markets.

Ample inventories in the physical market following increased arrivals from the major producing belts too added pressure.

In Sambhal total arrivals are at 50 Drums(1-drum=180kg), down by 10 Drums(1-drum=180kg) from previous day's arrivals.