Menthaoil On MCX Settled Up 1.46% At 920.1

Menthaoil on MCX settled up 1.46% at 920.1 taking strong cues from spots market. As per sources, climatic condition is good for the mentha crop due to which it is expected that this year production might increase 15% which will put the pressure on the prices. From supply demand front, arrivals are more in the major spots market of Uttar Pradesh while demand is average from the local buyers.

On the flip side, Chinese economy is showing signs of recovery due to which export demand might be increase in the coming days which might limit the downside. Prices of mentha oil had risen almost 25% post demonetisation in a month's time because traders in Uttar Pradesh were unwilling to sell their produce in lieu of online payments or cheques.

The new crop of mentha oil is being sold at 975 and 1,010 rupees per kg in Chandausi and Sambhal, respectively, down about 50-70 rupees in the last two weeks. The daily supply could rise to around 400 drums in the next two weeks. Expectations of higher output in 2017 will further dampen the sentiment moving ahead.

As on now stock positions of mentha in MCX accredited warehouses were around 3749 drums which is same against the previous day while in process were 156 drums, which is 108 more against the last day.

Technically market is under short covering as market has witnessed drop in open interest by -6.02% to settled at 1842 while prices up 13.2 rupees, now Menthaoil is getting support at 910.4 and below same could see a test of 900.8 level, And resistance is now likely to be seen at 928.3, a move above could see prices testing 936.6.
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