Technically MCX Menthol Oil is under long liquidation as market has witnessed drop in open interest by -0.3% to settled at 2012 while prices down -4.9 rupees.
Now Menthaoil is getting support at 917.5 and below same could see a test of 912.1 level, And resistance is now likely to be seen at 932, a move above could see prices testing 941.1.
Menthaoil on MCX settled down -0.53% at 922.8, as arrivals of the new crop, have started in the key wholesale markets of Sambhal and Chandausi in Uttar Pradesh.
About 100-120 drums in Sambhal and 70 drums in Chandausi (per day) of mentha oil have been arriving. Arrivals this season are about 20 days late than normal.
India's annual monsoon rainfall is expected to be 98 percent of the long-term average, the country's state-run weather office said, raising prospects of higher farm and economic growth.
Prices of mentha oil had risen almost 25% post demonetisation in a month's time because traders in Uttar Pradesh were unwilling to sell their produce in lieu of online payments or cheques.
The new crop of mentha oil is being sold at 975 and 1,010 rupees per kg in Chandausi and Sambhal, respectively, down about 50-70 rupees in the last two weeks.
The daily supply could rise to around 400 drums in the next two weeks.
Expectations of higher output in 2017 will further dampen the sentiment moving ahead. Mentha output this year is likely to rise by 10-12% to 36,000 tn, as weather remained largely conducive throughout the season.
Sentimental weakness will continuous for mentha demand as the key consumption sector (Tobacco products) is witnessing slowdown in demand. On the demand side, the seasonal demand emerges during winter season, especially from the pharma sector.
--Menthaoil trading range for the day is 912.1-941.1.
--Mentha oil spot at Sambhal closed at 1035.40 per 1kg. Spot prices was down by Rs.-7.30/-.
--Mentha oil prices fall as arrivals of the new crop, have started in the key wholesale markets of Sambhal and Chandausi in Uttar Pradesh.
--About 100-120 drums in Sambhal and 70 drums in Chandausi (per day) of mentha oil have been arriving.
--Expectations of higher output in 2017 will further dampen the sentiment moving ahead.
Courtesy: Kedia Commodities