Strong rally in mentha oil

Mentha oil futures was among the top performing agriculture commodities on Indian bourses last week. All the active contracts of mentha oil rallied to their five-year high on account of strong buying support. The most active November contract marked a high of ₹1,474 per kg from a low of ₹1,272 per kg.

However, in the last trading session, profit booking dragged the contract from its highs; it closed the week up about 16 per cent.

The spot market also witnessed a surge in price, from ₹1,443 per kg to ₹1,578 per kg in Chandausi market. In other markets such as Sambhal, the price rose to ₹1,580 per kg from ₹1,440 per kg and in Barabanki market too, the price saw an uptrend from ₹1,460 per kg to ₹1,560 per kg. One of the reasons for this rally is the increase in demand, and fall in supply, due to the start of the winter season. Besides the domestic (demand) market conditions, increase in export demand for mentha oil and its derivative products also aided the price surge last week.

Outlook

For the week ahead, the corrective fall can extend in the early trading sessions. However, strong demand may help in limiting the downside in the price and keep the overall uptrend intact.

The writer is Head-Commodity Research, Karvy Comtrade

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