Menthaoil October contract dropped Rs 5.1 and settled at Rs 1224.6 on profit booking at higher levels amid weak demand in the spot market. 

The total arrivals stood steady at 500-550 drums. Reports of ban in Pan Masala in some states had been keeping pressure on the market rates over last few days. Overall trading activities remained low but traders expect pick up 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. In Uttar Pradesh, the largest producer of Mentha Oil in India, the area has been forecast to rise to 2.10 lakh ha vs 1.75 lakh ha.

Higher stocks in the mandis from higher arrivals also kept pressure on the market sentiments. The contract made intraday low of Rs 1221.1 a kg and high of Rs 1249.9 a kg with the volume of 5360 and total open interest for the same contact was at 5046.

Now support for the menthol is seen at 1213.8 and below could see a test of 1203.1. Resistance is now likely to be seen at 1242.6, a move above could see prices testing 1260.7. On 26th September total stock of mentha oil at MCX-monitored warehouses at Chandausi was 1, 13, 250 kg of which 98,868 kg was physical stock and demat stock was 14, 382 kg.

Trading Ideas:

Mentha oil trading range for the day is 1203.1-1260.7.

Menthaoil spot is at 1395/-.Spot market is down by Rs.12/-.

Menthaoil dropped on profit booking at higher levels amid weak demand in the spot market.

Overall trading activities remained low but traders expect pick up in demand in the coming weeks

The total arrivals of mentha oil stood steady at 500-550 drums.