MCX Mentha Oil expected to trade 878.2-889.6 levels
Commodity Online | September 22 2016
UPDATED 14:26:30 IST

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MCX Zinc under short covering; Resistance seen at 186.1

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Mentha Oil on MCX settled up by 0.01% at 883.5 amid an increase in physical demand from major consuming industries in the domestic spot market. However upside seen limited as as export demand are not picking up also as per last months udpate exports have registered a decline in volume terms. China and Japan have reduced their buying quantity in the recent past due to the economic slowdown had impacted Mint product's exports which declined substantially from the export basket by 18% in terms of volume and 4% in terms of value year-on-year.

Exports of mint products stood at 21,150 tonne in FY16 valued at R2,577.59 crore against 25,750 tonne valued at R2,689.25 crore in FY15. The Spices Board said that the bulk of the exports is in the form of crystallised menthol. Mentha oil prices have fallen almost more than 11% since last 1month from 992.80 level to test 880 level this week due to the fund crisis in the market and lower Chinese demand for Indian Mentha oil. Initially, India’s mentha oil output was estimated to remain lower this year from 32,000 tonnes produced during last year. But, rainfalls later improved overall scenario that got worsened with scorching heat waves in May. Hence, overall mentha oil output for 2016-17 is now revised upwards at 32,000 tonnes.

At Chandausi market arrivals were reported at 15 Drums(1-drum-180kg), down by 5 Drums(1-drum-180kg) from previous trading day. At Bareilly market estimated market supply was at 2 Drums(1-drum-180kg), up by 1 Drums(1-drum-180kg) as against previous day. Technically now Mentha Oil is getting support at 880.8 and below same could see a test of 878.2 level, and resistance is now likely to be seen at 886.5, a move above could see prices testing 889.6.

Trading Ideas:
--Mentha Oil trading range for the day is 878.2-889.6.
--Mentha Oil spot at Sambhal closed at 1021.60 per 1kg. Spot prices is up by Rs.0.10/-.
--Mentha Oil prices gained amid an increase in physical demand from major consuming industries in the domestic spot market.
--However upside seen limited as as export demand are not picking up also as per last months udpate exports have registered a decline.
--Exports of mint products stood at 21,150 tonne in FY16 valued at Rs. 2,577.59 crore against 25,750 tonne valued at Rs. 2,689.25 crore in FY15.

Courtesy: Kedia Commodities