Menthaoil yesterday settled down -2.71% at 1008.5 tracking weakness in spot demand as profit booking was noted amidst fall in demand in the mandis. The recent rains have however affected the harvesting process and this could keep trend firm in medium term. Sources are suggesting some more supplies of new mentha oil in the first week of June. Moreover, weak demand by exporters also added some selling in the mentha oil market. The concerns of shift in production trend from natural mentha oil to synthetic mentha oil in international market might discourage the export demand of mentha oil in the coming months. Besides the new arrivals, the strong production estimates also propelled some stockiest selling from higher levels. The total mentha oil production is expected to be in the range of 52000-55000 tonnes in the current year, up almost 10-12% from the last year. This is mainly due to the better price realization and favourable crop conditions. Moreover, the total opening stocks of Mentha oil are expected to reach 13000-15000 tonnes in the next year. This may also convene the sufficient supplies of mentha oil next year. Technically market is under fresh selling as market has witnessed gain in open interest by 7.36% to settled at 3488 while prices down -28.1 rupee, now Menthaoil is getting support at 990 and below same could see a test of 971.4 level, And resistance is now likely to be seen at 1037.1, a move above could see prices testing 1065.6.

Trading Ideas:

Menthaoil spot is at 1097/-. Spot market is down by Rs. 23/-.

Mentha oil ended with losses tracking weakness in spot demand as profit booking was noted

Sources are suggesting some more supplies of new mentha oil in the first week of June.

Moreover, weak demand by exporters also added some selling in the mentha oil market.

Higher arrivals of the new crop (~250-300 drums) in mandis from harvesting have been keeping pressure on the market sentiments.