Menthaoil April contract dropped Rs 45.2 and settled at Rs 1084 amid fall in spot market demand. Adequate stocks in physical market following increased arrivals from Chandausi in Uttar Pradesh also put pressure on mentha oil. Higher stocks amidst low demand are likely to keep selling pressure intact for the commodity in the near term. Sentiments are likely to remain under pressure due to higher production prospects, high stock levels and better sowing area this year. In Rampur, mentha oil (68 GLC) quoted at Rs 1,225 per kg, in Chandausi Rs 1,240 per kg, in Sambhal at Rs 1,240 a kg, in Barabanki at Rs 1,200 a kg. On 23rd March, total stock of mentha oil at MCX-monitored warehouses at Chandausi was 1, 55, 685 kg of which 1, 55, 685 kg was physical stock and demat stock was nil. At Barabanki, the total stock was 8, 41, 039 kg of which, physical stock accounted for 8, 26, 278 and demat stock was 14,760 kg. As per latest reports, the total area under cultivation is expected to rise by 20% at 2.1 lakh ha vs 1.75 lakh ha last year. Sowing is nearly complete. Production is estimated higher at 60-65,000 tonnes higher than ~53,000 tonnes produced last year. It may be noted that last year's figure too was on the higher side-resulting in higher stock levels this year. The contract made intraday low of Rs 1084 a kg and high of Rs 1135.9 a kg with the volume of 4269 and total open interest for the same contact was at 2063. Now support for the menthol is seen at 1066.7 and below could see a test of 1049.4. Resistance is now likely to be seen at 1118.6, a move above could see prices testing 1153.2.

Trading Ideas:

Mentha oil trading range for the day is 1049.4-1153.2.

Menthaoil spot is at 1222/-. Spot market is down by Rs. 22/-.

Mentha oil ended with losses tracking fall in spot market demand

Adequate stocks in physical market following increased arrivals from Chandausi in Uttar Pradesh also put pressure.

Higher stocks amidst low demand are likely to keep selling pressure intact.