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Mentha oil futures on the Multi Commodity Exchange of India witnessed very volatile movement during the week ended February 23. There was a negative pressure on prices because of the subdued demand from end users. Supplies improved from previous weeks and put further pressure on prices. With the end of the winter season, the demand for mentha oil and its derivatives has already started diminishing.
The most active March contract of MCX mentha oil futures tumbled down to test a low of ₹1,252 per kg last week from the high of ₹1,385 per kg. However, on the last trading day of the week, the market managed to pare some loss and closed the week at ₹1,295 per kg. The new sowing season for mentha crop is expected to commence from the first week of March wherein there are expectations of sharp increase in acreage. However, the weather pattern in the months of March and April in Uttar Pradesh will play a crucial role in deciding the acreage and yield of mentha crop.
Outlook
For the week ahead, mentha oil futures prices are likely to trade on the negative side because of subdued demand amid higher supplies. Market participants are likely to wait and watch for the progress of sowing of mentha crop.
The writer is Head – Commodity Research, Karvy Comtrade
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