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Spot Mentha Oil Gains Further; Futures Up Over 2.5%

16 May 2018 6:43 pm
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NEW DELHI (Commoditiescontrol) - Mentha oil prices continued to move up at key markets of Uttar Pradesh on Wednesday amid a firm trend in futures trade.

At the Multi Commodity Exchange (MCX), mentha oil futures extended yesterday's uptrend and gained over 2.5 percent today as market participants created fresh positions along with short covering, tracking some short-term positive cues from spot market. However, commencement of fresh arrival and better output prospects limited the gains. 

As per trade sources, overall sentiment (medium to long-term) has turned bearish as fresh arrivals have begun in physical markets, i.e. Barabanki and Sambhal. Furthermore, arrivals at the benchmark market of Chandausi are likely to commence from next week, traders said.

However, some support for the short-term is still coming from restricted supplies at the fag-end of the season and expectation of recovery in export demand in the wake of declining rupee. Currently there is very limited stock left with the farmers.

Market experts were expecting a 25 percent rise in acreage can result in production of 40,000-41,000 tonnes of mentha oil for the ongoing season (2018) compared with around 30,000-33,000 tonnes produced last year.

Meanwhile, the downtrend in rupee has raised hopes of some recovery in export demand, especially from China. 
Yesterday, May 15, the rupee had lost 56 paise -- the second biggest single-day fall of 2018 -- to end at a new 16-month low of 68.07 as panic dollar demand rattled the currency market. 

In general, a weaker domestic currency makes exports more competitive.

India meets around 80 percent of the world natural mentha oil demand with its use in pharmaceutical, food safety, culinary, cosmetics, insecticides, scent and aromatherapy. The country annually exports around 20,000 -25,000 tonnes of mentha oil and allied products to the US, China, Europe and South America.























































































































At the Multi Commodity Exchange (MCX), mentha oil for delivery in May rose further by Rs 33.10, or 2.54 percent, to Rs 1,337.90 per kg, with an open interest of 877 lots.

The oil for June month delivery also traded up by Rs 3.60, or 0.31 percent, at Rs 1,172 per kg, clocking an open interest of 574 lots.

(By Commoditiescontrol Bureau; +91 9582843581)

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