Menthaoil settled up 2.46% at 977.3 supported by pickup in demand from consuming industries in the spot market. Further, restricted supplies from Chandausi in Uttar Pradesh too led to rise in mentha oil prices. In fact, huge carryover stocks from the previous year coupled with huge capacity built up of synthetic mint, a substitute of mentha oil, also discouraged farmers to bring less area under mentha plant this year. Trade sources estimate total area under mentha planting reported a decline of 20% to 1.75 lakh ha this season resulting into a proportionate fall in mentha oil production this year. As farmers moved towards some other cash crop as there is no compensation given to the farmers for the loss incurred. In addition, farmer pays 5%VAT plus 1.5% Mandi Tax when selling mint or mint oil. These add on taxes on mint is only applicable in UP. Sources indicate rates have fallen to low levels over last few weeks and further fall may be limited as domestic and export demand rise. At Barabanki market total arrivals are at 300 Drums(1-drum-180kg), unchanged as compared to previous day’s arrival. At Bareilly market estimated market supply was at 2 Drums(1-drum-180kg), up by 1 Drums(1-drum-180kg) as against previous day. At Rampur market sources reported arrivals at 8 Drums(1-drum=180kg), higher by 1 Drums(1-drum=180kg) as against previous day. At Sambhal market sources reported arrivals at 60 Drums(1-drum=180kg), steady as against previous day’s arrival. Technically market is under short covering as market has witnessed drop in open interest by -9.46% to settled at 5379 while prices up 23.5 rupee, now Menthaoil is getting support at 962.6 and below same could see a test of 947.9 level, And resistance is now likely to be seen at 986, a move above could see prices testing 994.7.

Trading Ideas:

Menthaoil trading range for the day is 947.9-994.7.

Mentha oil spot at Sambhal closed at 1074.00 per 1kg. Spot prices is up by Rs.15.30/-.

Mentha oil prices gained supported by pickup in demand from consuming industries in the spot market.

Further, restricted supplies from Chandausi in Uttar Pradesh too led to rise in mentha oil prices.

At Rampur market sources reported arrivals at 8 Drums(1-drum=180kg), higher by 1 Drums(1-drum=180kg) as against previous day.