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Mentha oil has stiff resistance at Rs 1,320 level

By Vedika Sharad Narvekar

Amid lack of fresh triggers, MCX mentha oil traded in a tight range of Rs 1,270 to Rs 1,296 last week. Production was higher in 2019-20 season (June-May). Market sources say that production in 2019-20 was around 48,000-50,000 tonnes, although no official data is available. At present, the new crop is coming from Madhya Pradesh. However, the crop being lower than the traditional mentha-growing state, Uttar Pradesh, the impact on prices is negligible.

Around 75 per cent of mentha oil produced is exported. Thus, overseas demand is an important factor. At present, demand is modest and would continue to stay that way in the coming weeks.

Sowing for the new season will commence next month and the market expects the acreage to be higher this season as prices of over Rs 1,100 a kg have persisted (more than double the cost of production).

Thus, on fundamentals, we don’t see any major price movements in mentha oil.

Stocks of mentha oil at MCX-accredited warehouse declined to 1,62,106.60 kg by January 11 compared with 1,70,757.90 kg on January 3.

Technically, Rs 1,320 would be a major resistance January mentha oil contract on MCX, while strong support is seen at Rs 1,250.

(Vedika Sharad Narvekar, us Research Analyst- Agro Commodities at Anand Rathi. Investors are advised to consult financial advisers before taking an investment calls based on these observations)

Source: Economic Times