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Technically market is under short covering as market has witnessed drop in open interest by 8.91% to settled at 1145 while prices up 13.3 rupees.
Now MCX Mentha Oil is getting support at 1652.3 and below same could see a test of 1613 level, And resistance is now likely to be seen at 1714.2, a move above could see prices testing 1736.8.
Mentha Oil on MCX settled up by 0.79% at 1691.7 due to bullish demand outlook from domestic market as well as exporters. Spot markets are also witnessing strong consumption demand amid restricted supplies.
Bumper crop harvest has been discounted in the market and market is moving upwards on rising demand from end users. 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. 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.
According to estimates, mentha oil production in India for crop year 2016-17 will be around 38,000 tonnes.Mentha oil spot at Sambhal closed at 1833.50 per 1kg. Spot prices was up by Rs.1.20/-.
Trading Ideas:
–Mentha Oil trading range for the day is 1613-1736.8.
–Mentha Oil spot at Sambhal closed at 1833.50 per 1kg. Spot prices was up by Rs.1.20/-.
–Mentha Oil prices rallied due to bullish demand outlook from domestic market as well as exporters.
–Spot markets are also witnessing strong consumption demand amid restricted supplies.
–Bumper crop harvest has been discounted in the market and market is moving upwards on rising demand from end users.
Courtesy: Kedia Commodities
Source: Commodityonline.com
