Mentha oil may test support at Rs 1,186 level

By Vedika Sharad Narvekar

Mentha oil futures on MCX finally breached its key support level at Rs 1,250 and settled 2.3 per cent lower last week. In the physical market, demand was sturdy. Exporters are also actively buying mentha oil. However, besides seasonal demand, all other fundamental factors are pointing toward further fall in the prices.

Market participants are aware of the fact that higher production in the current season (2019-20) will ensure smooth availability throughout the season. As per market sources, production in 2019 stood at around 48,000-50,000 tonnes, although no authentic data is available on the same.


Meanwhile, sowing for the new season would commence next month, and area under mentha cultivation is expected to be higher in the upcoming season. Thus, prices may once again test season’s low of Rs 1,186.

Stocks of mentha oil at MCX-accredited warehouses stood at 1,14,546.650 kg against 1,62,106.60 kg last week.

Technically, mentha oil has strong support at around Rs 1,186-1,174 zone and resistance is seen in Rs 1,244-1,270 range.

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