MCX Mentha Oil under fresh buying; Resistance seen at 1695.5

Technically Mentha Oil market is under fresh buying as market has witnessed gain in open interest by 2.8% to settled at 880 while prices up 59.6 rupees.

Now MCX Mentha Oil is getting support at 1628.5 and below same could see a test of 1584.9 level, And resistance is now likely to be seen at 1695.5, a move above could see prices testing 1718.9.

Mentha Oil on MCX settled up by 3.7% at 1672 amid improved demand from consuming industries at the domestic spot market. However, upside seen limited amid expectations of higher acreage under mint in 2019 due to lucrative prices throughout last year.

Further, lower arrivals from major producing belts of Chandausi in Uttar Pradesh limited the downside. Export demand of oil in global market is likely to be improved due to recovery in currency which is supportive for prices.

Farmers have started preparing to harvest mentha this time in many villages of Saheb Tehsil. Actually, this time demand was high in the market and availability of Mentha Oil was low. Farmers and businessmen are hoping that this time the harvest of mentha will be more. Because for a few years the price of Mentha was very low.

Since last few years the number has been steady to lower. But in response to decent appreciation in last years’ prices, farmers sowing improved resulting in rise in production prospects. Therefore, the total availability of oil will rise this year.

As of now traders expect a 20-25% rise in sowing versus last year. It should be noted that this year’s production expectation of 38500- 39000 MT remains slightly above the average production of 36,968 MT productions seen in between 2013- 2018.Mentha Oil spot at Sambhal closed at 1726.00 per 1kg. Spot prices was up by Rs.16.60/-.

Trading Ideas:
–Mentha Oil trading range for the day is 1584.9-1718.9.
–Mentha Oil spot at Sambhal closed at 1726.00 per 1kg. Spot prices was up by Rs.16.60/-.
–Mentha Oil prices gained amid improved demand from consuming industries at the domestic spot market.
–However, upside seen limited amid expectations of higher acreage under mint in 2019 due to lucrative prices throughout last year.
–Export demand of oil in global market is likely to be improved due to recovery in currency which is supportive for prices.

Courtesy: Kedia Commodities