Mentha oil on MCX settled up by 0.58% at 983.8 amid pick-up in demand in the domestic spot market. Further, tight stocks due to fall in arrivals from Chandausi too led to the rise in mentha oil prices. However upside seen limited on speculation that the area under cultivation can increase this year resulting good production. Total production of mentha oil during the current season is 32,000-34,000 tonnes against preliminary estimates of around 40,000 tonnes. Unfavourable weather conditions during harvesting period led to the drop in production. On the demand side, the seasonal demand emerges during winter season, especially from the pharma sector. Sources mentioned that nearly 14500 MT of mint products were exported in six months of the current financial year. This implies that export demand for the complete financial year can be between 27000 and 29000 MT quite cheaper, versus 23000 of total exports last year. Farmers are keeping most of the stocks in their hands. Most buyers are willing to buy at these levels. Since farmers are keeping most of stocks, thus whenever requirement arises, industry people will be purchasing from the farmers. Trade sources estimate that total area under Mentha planting has dropped by 20% to 1.75 lakh ha this season resulting into a proportionate fall in Mentha oil production this year. Mentha oil spot at Sambhal closed at 1120.20 per 1kg. Spot prices was up by Rs.3.70/-.Technically market is under fresh buying as market has witnessed gain in open interest by 0.21% to settled at 2341 while prices up 5.7 rupees, now Menthaoil is getting support at 980.2 and below same could see a test of 976.6 level, And resistance is now likely to be seen at 987.2, a move above could see prices testing 990.6.

Trading Ideas:

Menthaoil trading range for the day is 976.6-990.6.

Mentha oil spot at Sambhal closed at 1120.20 per 1kg. Spot prices was up by Rs.3.70/-.

Mentha oil gained amid pick-up in demand in the domestic spot market.

Further, tight stocks due to fall in arrivals from Chandausi too led to the rise in mentha oil prices.

However upside seen limited on speculation that the area under cultivation can increase this year resulting good production.