Technically Mentha Oil market is under fresh selling as market has witnessed gain in open interest by 11.76% to settled at 38 while prices down 7.6 rupees.
Now MCX Mentha Oil is getting support at 1064.5 and below same could see a test of 1060.8 levels, and resistance is now likely to be seen at 1073.4, a move above could see prices testing 1078.6.
Mentha Oil yesterday settled down by 0.71% at 1068.3 amid due to low demand and expectation of a rise in acreage this season. There were expectations of higher area under cultivation for crop year 2020-21.
After a week's delay due to heavy rainfall, oil from new mentha crop has started arriving at the key wholesale market of Barabanki in Uttar Pradesh, traders said. So far, arrivals of the spice oil are at 5-10 drums. New mint crop is being harvested in Bareilly, Sitapur and Konch districts.
Demand is there for new mentha crop but it will take some time for bulk arrivals to hit markets. New arrivals are likely to pick up during the first week of June. In the first week of June, arrivals are likely to touch 100 drums per day.
During the peak arrival season after mid-June, 400-500 drums will collectively arrive daily in the markets of Chandausi, Sambhal and Barabanki in Uttar Pradesh.
Prices of the spice oil are also likely to remain on the downside as production is seen at a record high of 55,000-60,000 tn this year, up nearly 50%. The yield of mentha is expected to be high this time too, due to this, traders are not taking fresh positions in mentha.
--Mentha Oil trading range for the day is 1060.8-1078.6.
--Mentha Oil spot at Sambhal closed below 1200 level as demand concerns.
--Mentha Oil prices dropped amid due to low demand and expectation of a rise in acreage this season.
--There were expectations of higher area under cultivation for crop year 2020-21.
--The yield of mentha is expected to be high this time too, due to this, traders are not taking fresh positions in mentha.
Courtesy: Kedia Commodities