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Technically Mentha Oil market is under fresh selling as market has witnessed gain in open interest by 1.52% to settled at 1267 while prices down 11.1 rupees.
Now MCX Mentha Oil is getting support at 1600.6 and below same could see a test of 1580.7 level, And resistance is now likely to be seen at 1652.2, a move above could see prices testing 1683.9.
Mentha Oil on MCX settled down by 0.68% at 1620.6 due to selling pressure in the market following bearish fundamental factors. Spot markets are witnessing low demand amid adequate supply which weighed on prices.
Low demand outlook in mentha oil in domestic as well as global market due to expectation of recovery in Indian Rupee against the U.S dollar. 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. Mandi Department, which assumes Mantha as an agricultural product and receives the mandatory duty of one and a half percent, the GST of the same commerce tax department, Mentha crop, is not considered as agricultural product and 15 percent GST is charged.
Due to this double tax, the price of mentha product increases, whereas synthetic mentha is much cheaper, so many companies making mentha products have started using synthetic mentha. Due to which 50 lakh farmers of India who are producing mentha are being affected.
Trading Ideas:
–Mentha Oil trading range for the day is 1580.7-1683.9.
–Mentha Oil spot at Sambhal closed at 1835.30 per 1kg. Spot prices was remain unchangeby Rs.0.00/-.
–Mentha Oil dropped due to selling pressure in the market following bearish fundamental factors.
–Spot markets are witnessing low demand amid adequate supply which weighed on prices.
–There could be chances of crop damage to certain extend due to unfavourable weather condition.
Courtesy: Kedia Commodities
Source: Commodityonline.com
