MCX Mentha Oil under fresh selling; Support seen at 1575.6

Technically Mentha Oil market is under fresh selling as market has witnessed gain in open interest by 17.51% to settled at 463 while prices down 3.5 rupees.

Now MCX Mentha Oil is getting support at 1575.6 and below same could see a test of 1557.5 level, And resistance is now likely to be seen at 1604.4, a move above could see prices testing 1615.1.

Mentha Oil on MCX settled down 0.22% at 1593.8 due to low demand at major physical centers. Pressure also seen 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. The surge in output is likely due to buoyancy in planting intentions, not only in the traditional pockets of Uttar Pradesh and Bihar in recent days, but also in Madhya Pradesh.

Mentha sowing may witness a huge jump this year because of high returns farmers experienced the whole of last year. Production of mentha oil is expected to rise to 48,000-50,000 tn in 2019 from 33,000-35,000 tn last year.

This year, sowing of the crop started towards the end of last month, a couple of weeks later than usual due to extended cold weather in all major growing regions. Official data on mentha, with respect to sowing or production and export, is not available as trade in the commodity is tightly controlled by a few.

This season, the area under mint is expected to be 250,000-265,000 ha. Speculation that German major BASF SE has re-started deliveries of synthetic mentha oil will also be a deterrent to prices. BASF is completing its previous orders which were left pending after the manufacturing unit caught fire last year. They may start taking fresh orders tentatively by March.

Trading Ideas:

–Mentha Oil trading range for the day is 1557.5-1615.1.
–Mentha Oil spot at Sambhal closed at 1722.50 per 1kg. Spot prices was down by Rs.0.20/-.
–Mentha Oil settled down due to low demand at major physical centers.
–Pressure also seen amid expectations of higher acreage under mint in 2019 due to lucrative prices throughout last year.
–Mentha sowing may witness a huge jump this year because of high returns farmers experienced the whole of last year.

Courtesy: Kedia Commodities