Menthaoil yesterday settled up 2% at 863.5 tracking a firm trend at spot market on strong retailers and export demand. Sentiments were further bolstered on tight supplies in the spot markets due to less arrival from growing belts of Chandausi in Uttar Pradesh. It is to be noted that higher stocks and better crop is not letting the rates to move up much. With winter season demand expected to pick up in coming months, the downtrend seems limited. 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. 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. 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. Technically market is under short covering as market has witnessed drop in open interest by -6.9% to settled at 5089 while prices up 16.9 rupee, now Menthaoil is getting support at 853.6 and below same could see a test of 843.6 level, And resistance is now likely to be seen at 868.5, a move above could see prices testing 873.4.

Trading Ideas:

Menthaoil trading range for the day is 843-872.8.

Menthaoil spot is at 958/-. Spot market is up by Rs. 10/-.

Mentha oil rose tracking a firm trend at spot market on strong retailers and export demand.

Sentiments were further bolstered on tight supplies in the spot markets due to less arrival from growing belts of Chandausi

With winter season demand expected to pick up in coming months, the downtrend seems limited