Menthaoil September contract dropped Rs 54.8 and settled at Rs 1314.7 in the wake of strong supplies by cultivators in the local mandies along with dearth of buying by gutka manufacturers in Delhi. Traders mentioned that total production of mentha oil in the current year is estimated at 37000 tonnes against 29000 tonnes that was reported last year. Strong production for the current year has incited strong supplies of mentha oil by cultivators at elevated levels. Moreover, ban imposed by Delhi government on gutka sale in the state has also reduced the demand of mint products by gutka manufacturers. As per market sources, the total arrivals of mentha oil reported at around 600-700 drums. Overall trading activities remained low but traders expect pickup in demand in the coming weeks. Better production prospects have been keeping overall sentiments weak. Production this year likely to exceed 50000 tonnes as per sources vs 38000 tonnes last year Higher sowing activities due to the high rates obtained by farmers last year resulted in higher production this year. The contract made intraday low of Rs 1314.7 a kg and high of Rs 1363 a kg with the volume of 5249 and total open interest for the same contact was at 6046.Now support for the menthol is seen at 1298.6 and below could see a test of 1282.5. Resistance is now likely to be seen at 1346.9, a move above could see prices testing 1379.1.

Trading Ideas:

Mentha oil trading range for the day is 1282.5-1379.1.

Menthaoil spot is at 1483/-.Spot market is down by Rs.39/-.

Mentha oil plunged in the wake of strong supplies by cultivators in the local mandies

Total production of mentha oil in the current year is estimated at 37000 tonnes against 29000 tonnes

The total arrivals of mentha oil reported at around 600-700 drums.