Mentha oil futures under pressure on higher output expectations.


Mentha oil MCX

Mentha oil futures under pressure

Sowing of Mentha in chief growing areas have commenced and are 50% complete. According to market sources, sowing may increase by 20 to 30% in the coming season. Production of Mentha is expected to cross last year’s figure of 36,000 tonnes. Selling pressure has been seen at higher levels due to increasing arrivals on liquidation of stocks at the end of the current marketing year and also on reports that the acreage may increase for the next marketing year. Arrivals in entire UP stand around 130 drums (1drum – 180 kgs) daily.  Exports of Mentha during April 2011 to January 2012 witnessed a decline of 6% to 12,850 tonnes as compared to 13,550 tonnes in the same period last year. Exports also declined by 40% to 950 tonnes MoM in January 2012 as compared to 1,600 tonnes in the month of December 2011. Total Special Cash margin of 25% on the long side has been imposed on all contracts of Mentha Oil from March 9, 2012.

Mentha prices are expected to witness more selling pressure on account of bearish market sentiments resulting from better acreage  and possibility of improved output this season.  Sell at rises should be ideal.

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