Mentha oil spot and futures prices may move down further in the next few days on account of increased selling pressure due to higher stocks supported by dull buying interest.
Mentha oil January 2008 contracts on NCDEX was down Rs 15 to trade to Rs 425 per kg on continued selling pressure by operators and stockists. Spot price at Chandausi (UP) was also down Rs 20 to trade at Rs 481 per kg on Tuesday over last month on fresh buying from exporters. Mentha oil January 2008 contracts (which expires on Jan 31) on MCX was also down Rs 16 to trade to Rs 431 per kg on Tuesday. The open interest increased to 1,640 lots from 1,120 lots in mid-December while trading volume also increased to 281 kg from 70 kg.
?Spot and futures markets are under pressure due to dull physical demand in the market. Buyers, mainly of candy and confectionary producers, are inactive and there are ample stocks in the market supporting the bearish sentiment,? an analyst said. Also, there are reports that sowing activity has started in some mentha growing regions.
Traders expect natural mentha oil production in the country may increase to 63,000 tonne for 2008 from 45,000 tonne recorded for 2007 while China produced about 1,000 tonne in the past two years.