Some short covering at the lower levels and expectations of improved demand at these low rates provided some support to the prices for Mentha Oil on Wednesday. In the midst of stockists selling pressure, buyers are waiting for reduced offer to start their purchase.
As rate of mentha oil is very low at present, bulls are hopeful for a bullish market trend in long term- but that would depend on rise in exports from China. Due to arrival pressure however, market sentiments are bearish as of now. Any improved demand at the lower levels can move prices up however.
Increasing stockists selling has been there. Buying interest is reportedly negligible at present and they are buying it as per their requirements. There is good stock reportedly in the futures exchange warehouses.
Reports indicate exporters are trying to dominate market sentiments and trying to bring down prices to pick it up at lower rates. Export demand is expected to pick up slowly as stock level is reportedly low with exporters.
Exports from China are yet to pick up due to the turmoil in the International markets and this is creating a panic in Indian markets also.
Production of mentha oil is expected at 20,000 ton this year. The production was 23,000 ton last year. The total consumption in country and abroad is expected at 27,000 ton. The rest of the consumption is likely to be met from the available stock.
Price Drivers
BullishExpectations of export demand picking up at the low rates.
The Oil production got affected due to rains.
Reports of crop damage due to rains.
Very low arrivals in the mandis.
Lower selling activity at these rates.
Absence of irrigation may lead to lower productivity.
BearishTurmoil in the International markets keeps export demand from China low. Overall export demand remains low.
A general weakness in agri commodity prices also has a bearish impact.
Courtesy: Religare Commodities
