Menthaoil on MCX settled up 0.72% at 896.7 amid increase in physical demand from major consuming industries in the domestic spot market. China and Japan have reduced their buying quantity in the recent past due to the economic slowdown had impacted Mint product's exports which declined substantially from the export basket by 18% in terms of volume and 4% in terms of value year-on-year. Exports of mint products stood at 21,150 tonne in FY16 valued at R2,577.59 crore against 25,750 tonne valued at R2,689.25 crore in FY15. The Spices Board said that the bulk of the exports is in the form of crystallised menthol. Initially, India's mentha oil output was estimated to remain lower this year from 32,000 tonnes produced during last year. But, rainfalls later improved overall scenario that got worsened with scorching heat waves in May. Hence, overall mentha oil output for 2016-17 is now revised upwards at 32,000 tonnes. While some sources estimate that total area under Mentha planting has dropped by 25% to 1.70 lakh ha this season resulting into a proportionate fall in Mentha oil production this year. At Rampur market estimated market supply was at 7 Drums(1-drum=180kg), up by 1 Drums(1-drum=180kg) as compared to previous day. At Barabanki market total arrivals are at 350 Drums(1-drum-180kg), unchanged as compared to previous day's arrival. At Chandausi market total arrivals are at 10 Drums(1-drum-180kg), steady as against previous day's arrival. Technically market is under fresh buying as market has witnessed gain in open interest by 4.15% to settled at 4869 while prices up 6.4 rupee, now Menthaoil is getting support at 890.8 and below same could see a test of 885 level, And resistance is now likely to be seen at 900.7, a move above could see prices testing 904.8.

Trading Ideas:

Menthaoil trading range for the day is 885-904.8.

Mentha oil spot at Sambhal closed at 1036.60 per 1kg. Spot prices is up by Rs.0.30/-.

Mentha oil gains amid increase in physical demand from major consuming industries in the domestic spot market.

China and Japan have reduced their buying quantity in the recent past due to the economic slowdown had impacted Mint product's exports.

India's mentha oil output was estimated to remain lower this year from 32,000 tonnes produced during last year.