Mentha oil March futures prices on the Multi Commodity Exchange (MCX) have jumped up by nearly 15% in just two weeks on reports of a likely drop in acreage for 2009 crop supported by stockists holding, trade sources said.
Mentha oil March 2009 contracts gained by about Rs 80 to trade at Rs 597.40 per kg on Tuesday over the past two weeks on improved demand from domestic markets. Spot prices in the producing centre also increased by nearly Rs 22-25 a kg as major stockists are holding in the exchange designated warehouses.
?MCX March contract is witnessing some correction, after testing a high of Rs 604 per kg. At present, the availability of stocks in the exchange warehouses is very low at 752 drums (1 drum = 180 kgs). This will support the prices to remain firm in the short term,? Naveen Mathur, head, Angel Commodities told FE. ?The medium to long term trend would depend on the overseas demand which is currently at a very slow pace. Also, weather will play a crucial role in affecting the availability of mentha oil and its next crop size,? he added.
Now prices are seen in correction mode due to profit booking at higher levels and easing demand ahead of summer season.
?Initial reports of sowing are indicating less acreage under mentha crop for the year, which may be a bullish factor in days to come. Arrivals to the spot market have increased to 300 drums per day,? Tarun Satsangi, AVP research (commodities), Bonanza Commodity Brokers said.
In MCX April futures counter, immediate resistance is seen at Rs 580 a kg and support is at Rs 550 and look to sell around Rs 570-575 with stop loss above Rs 580 and target Rs 550-536, analyst said.
Exports of mint products, mentha oil, menthol and menthol crystals, eased 4.35% to 17,500 tonne in the April-January (2008-2009) period from a year ago.