Technically Mentha Oil market is under long liquidation as market has witnessed drop in open interest by 0.39% to settled at 1281 while prices down 5.4 rupees.
Now MCX Mentha Oil is getting support at 915.1 and below same could see a test of 912.8 levels, and resistance is now likely to be seen at 921.1, a move above could see prices testing 924.8.
Mentha Oil yesterday settled down by 0.59% at 917.3 as demand from consumer side is extremely weak and industrial demand is also not picking up as industries are now finding fixed price of mentha from synthetic mentha.
Major physical market player expects demand to sluggish for next few week as cash crunch seen in spot market, while expectations are high about demand improvement ahead of winter season starts.
China is one of the biggest buyer for Indian Mentha, no much buying inquiry from China as mainland China and Hong Kong markets were shut. Speculation are also high that production this year will be lower as compare with last year because of two important factors.
Firstly damages due to rain in key area and secondly farmers for the last 2 years where sowing mentha but due to not getting much profit at intervals there had been shift to other crops also.
There is a possibility of an average reduction of 24-25 percent in the production of the total summer crop, the farmers said that the mentha crop which used to have a recovery of 8 to 10 kg oil per hectare, is now coming out only 6 kg. In Sambhal spot market, Mentha oil gained by 28.6 Rupees to end at 1056 Rupees per 360 kgs.
–Mentha Oil trading range for the day is 929.3-955.1.
–In Sambhal spot market, Mentha oil dropped by -5.2 Rupees to end at 1059.8 Rupees per 360 kgs.
–Mentha Oil prices remained supported as support seen after India saw a slight in fresh Covid cases, with unlockdown ahead of festival season.
–Prices got support in last few weeks as due to crop failure and low recovery of oil.
–Availability of Mentha oil will be low and demand from industries are expected to improve ahead of winter season.
Courtesy: Kedia Commodities
Source: Comodity Online