Mentha oil falls on muted spot demand

NEW DELHI: Mentha oil prices slipped in futures trade on Tuesday on muted demand by consuming industries at spot markets.

Speculators avoided fresh positions in mentha oil futures due to muted demand from consuming industries at the spot market against higher supplies from key producing regions.

Around 11 am, MCX Mentha oil was at Rs 1,258.40 per kg, down by Rs 6.30, or 0.50 per cent.

Mentha oil (August) traded mostly in a range between Rs 1,280 on the higher side to Rs 1,249 levels on the lower side during the last week due to low speculative buying amid lack of spot buying demand by consuming industries.

This week Mentha oil August future opened on a negative note within the aforesaid range and now, trading near Rs 1,249 levels on the daily chart.

Analysts say there may be some speculative buying around lower levels, but other than the occasional buying, the overall sentiment is still weak for the commodity on account of expectations of the higher plantation of mentha in the major producing regions.

"Traders and investors should have a ‘sell on rise’ strategy in mentha oil amid weak fundamental cues," said Romesh Tiwari, Head of Research, CapitalAim.

He added that mentha oil(August) is trading downwards and sustaining below the Rs 1,280 level on the daily chart. It is also below the 50-day moving average on the same chart and MACD has shown a downward crossover. The RSI on the daily chart is showing the sell signal which is now placed at 47.08 level.

"Mentha oil Aug future has important resistances at Rs 1,280 and Rs 1,340 levels, whereas it has support at Rs 1,230 and Rs 1,190 levels," Tiwari said.