Commodity Trading Tips for Menthaoil by KediaCommodity

Ajay Kumar Kedia 30 December 2013

Menthaoil settled up 1.11% at 847.2 triggered by rising demand from consuming industries in spot markets. Further, tight stocks position following restricted arrivals from producing region supported the prices. However higher production prospects and reports of better sowing due to favorable crop conditions limited the upside. As per market sources, the total stock position of around 34-35 thousand tonnes of mentha oil has been reported in the major mandies. This can easily meet the average annual domestic demand of 32-33 thousand tonnes . Therefore, comfortable stocks has encouarged strong stockiest selling at every rise. The market sources also suggested that all the major pharmaceutical and food confectionery industries are already sitting with comfortable stocks in their warehouses. 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. Mentha oil Production this year expected higher at more than 60000 tons versus 50000 tons last year due to higher demand from pharmaceutical industries. The area under crop this year expected higher at 2.10 lakh hectares versus 1.75 lakh hectares last year. Technically market is under fresh buying as market has witnessed gain in open interest by 5.59% to settled at 5838 while prices up 9.3 rupee, now Menthaoil is getting support at 838.4 and below same could see a test of 829.5 level, And resistance is now likely to be seen at 853.8, a move above could see prices testing 860.3.