Menthaoil On MCX Settled Up 3.5% At 1382.7

Menthaoil on MCX settled up 3.5% at 1382.7 by taking positive cues from the spot market on surging demand from consuming industries at the spot market. Prices also seen supported due to restricted supplies from the major producing belts of Chandausi in Uttar Pradesh. Anticipation of bumper crop harvest and nearing of harvesting season limiting the upside.

Arrivals in Sambhal stood at 400 drums compared to 350 drum a day ago while in Barabanki supplies rose to 500 drums from 450 drums a day earlier. According to preliminary estimates, mentha oil production in 2018-19 would be 40,000-45,000 ton against last year's production of 35,000 tons. As per preliminary estimates, acreage under mentha crop will rise this year as the farmers are encouraged by higher price in recent past. As per trade sources, all the major markets are likely to witness higher inflow of the produce.

There could be chances of crop damage to certain extend due to unfavourable weather condition. Besides, farmers are likely to hold back the stocks as the present prices are not remunerative for them. However, in recent years, the growth in production and consumption of synthetic mentha has influenced the demand for natural mentha. As per sources, India contributes around 80% to the total global mentha oil production. Total global production stood at around 48,000 tonnes, out of which India produces between 30,000-40,000 tonnes. 

Technically market is under short covering as market has witnessed drop in open interest by -0.14% to settled at 1388 while prices up 46.8 rupees, now Menthaoil is getting support at 1356.3 and below same could see a test of 1329.9 level, And resistance is now likely to be seen at 1399.2, a move above could see prices testing 1415.7.

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