Menthaoil September contract dropped Rs 42.4 and settled at Rs 1190.6 due to weak spot demand amid on news of ban on gutkha. Now Gutkha is ban in 11 states including Delhi. However, decision is still pending in UP. Anticipation of fall in mentha consumption from Tobacco industry is keeping mentha oil prices under pressure. Tobacco industry contributes to 25-30% usage of total mentha oil production. Therefore, ban on these products is likely to have negative impact on mentha oil prices. Mentha oil arrival reported around 450-500 drums in different spot markets. Traders estimated the total production of oil in the current year 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. In Rampur, mentha oil (68 GLC) quoted at Rs 1,380 per kg, in Chandausi Rs 1,380 per kg, in Sambhal at Rs 1,380 a kg, in Barabanki at Rs 1,360 a kg. On 20th September total stock of mentha oil at MCX-monitored warehouses at Chandausi was 1, 13, 250 kg of which 96,712 kg was physical stock and demat stock was 16, 538 kg. At Barabanki, the total stock was 23, 69, 384 kg of which, physical stock accounted for 19, 26,501 and demat stock was 4, 42, 883 kg. The contract made intraday low of Rs 1185.1 a kg and high of Rs 1230.9 a kg with the volume of 1409 and total open interest for the same contact was at 3524. Now support for the menthol is seen at 1173.5 and below could see a test of 1156.4. Resistance is now likely to be seen at 1219.3, a move above could see prices testing 1248.

Trading Ideas:

Mentha oil trading range for the day is 1156.4-1248.

Menthaoil spot is at 1372/-.Spot market is down by Rs. 40/-.

Mentha oil ended with losses due to weak spot demand amid on news of ban on gutkha.

Anticipation of fall in mentha consumption from Tobacco industry is keeping mentha oil prices under pressure

Mentha oil arrival reported around 450-500 drums in different spot markets.