Menthaoil yesterday settled up 1.1% at 854.5 due to tight stocks position in the physical market due to restricted arrivals from producing belts. Sentiment improved further on account of good demand from consuming industries and lower arrivals from Chandausi in Uttar Pradesh. Moreover, the total opening stocks of the current year were also estimated higher at 12 thousand tonnes against 8 thousand tonnes that were reported last year. Market sources suggested that the total production of mentha oil is estimated around 54-55 thousand tonnes in the current year against 45 thousand tonnes of the last year. This is mainly due to the better price realization and favourable crop conditions. Sources also added that the total daily arrivals of mentha oil are also likely to witness some momentum in the coming days as farmers will liquidate their stocks ahead of festival season. Market sources suggested that strong demand is mainly on the account of possibility of poor sowing acreage in the next season as a weak price trend in the current year will divert the farmer's interest towards other crops. This will also instigate the fresh buying of long term investors from lower levels. Technically market is under short covering as market has witnessed drop in open interest by -5.23% to settled at 5288 while prices up 9.3 rupee, now Menthaoil is getting support at 846.5 and below same could see a test of 838.4 level, And resistance is now likely to be seen at 861.1, a move above could see prices testing 867.6.

Trading Ideas:

Menthaoil trading range for the day is 838.7-867.9.

Menthaoil spot is at 945/-. Spot market remains unchanged/-.

Mentha oil prices rose due to tight stocks position in the physical market due to restricted arrivals from producing belts.

Sentiment improved further on account of good demand from consuming industries and lower arrivals from Chandausi

Market sources suggested that strong demand is mainly on the account of possibility of poor sowing acreage in the next season