Menthaoil September contract gains Rs 4.8 and settled at Rs 1362 as demand showed signs of improving at these lower levels amidst fall in arrivals in the mandi. Sources anticipate current rates are too low and expect demand to pick up in coming weeks. 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 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. 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. However traders also expect the demand to rise over next few months once the prices stabilize at the lower levels as the arrivals get over. The contract made intraday low of Rs 1355 a kg and high of Rs 1364.7 a kg with the volume of 2926 and total open interest for the same contact was at 6485. Now support for the menthol is seen at 1356.4 and below could see a test of 1350.9. Resistance is now likely to be seen at 1366.1, a move above could see prices testing 1370.3.

Trading Ideas:

Mentha oil trading range for the day is 1350.9-1370.3.

Menthaoil spot is at 1535/-.Spot market is up by Rs. 8/-.

Mentha oil ended with gains as demand showed signs of improving at these lower levels

Sources anticipate current rates are too low and expect demand to pick up in coming weeks.

In Uttar Pradesh the area has been forecast to rise to 2.10 lakh ha vs 1.75 lakh ha