MCX Mentha Oil under long liquidation; Support seen at 1223.1
Commodity Online | January 23 2020
UPDATED 10:20:15 IST

MCX Mentha Oil likely to move in a range of 1147.6-1179.6

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Technically Mentha Oil market is under long liquidation as market has witnessed drop in open interest by 11.05% to settled at 491 while prices down 6 rupees.

Now MCX Mentha Oil is getting support at 1223.1 and below same could see a test of 1216.8 levels, and resistance is now likely to be seen at 1235.7, a move above could see prices testing 1242.

Mentha Oil on MCX settled down by 0.49% at 1229.5 as demand in the spot market is also low, due to low arrivals from the big centers of Uttar Pradesh. Last year, farmers sowed more due to good prices.

Mentha Oil production during the year 2019-20 may increase by 30-40%. Pressure also seen after the Bihar state government has completely banned all types of pan masala. Currently, this ban has been imposed for 12 months. Prices also seen pressure earlier amid expectations of higher acreage under mint 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. 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 from 33,000-35,000 tn last year. There were estimations of a 20-25% rise in sowing in 2019 versus last year. Mentha oil spot at Sambhal closed at 1392.20 per 1kg. Spot prices was down by Rs.0.40/-.

Trading Ideas:
--Mentha Oil trading range for the day is 1216.8-1242.
--Mentha Oil spot at Sambhal closed at 1392.20 per 1kg. Spot prices was down by Rs.0.40/-.
--Mentha Oil dropped as demand in the spot market is also low, due to low arrivals from the big centers of Uttar Pradesh.
--Pressure also seen after the Bihar state government has completely banned all types of pan masala.
--Mentha sowing may witness a huge jump this year because of high returns farmers experienced the whole of last year.

Courtesy: Kedia Commodities

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