Menthaoil yesterday settled down -0.35% at 955.7 due to higher production prospects and reports of better sowing. 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 long liquidation as market has witnessed drop in open interest by -2.7% to settled at 4035 while prices down -3.4 rupee, now Menthaoil is getting support at 940.8 and below same could see a test of 925.9 level, And resistance is now likely to be seen at 973.8, a move above could see prices testing 991.9.

Trading Ideas:

Menthaoil spot is at 1065/-. Spot market is down by Rs. 4/-.

Mentha oil ended with losses due to higher production prospects and reports of better sowing.

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

The total mentha oil production is expected to be in the range of 52000-55000 tonnes in the current year.

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