Gains are seen in mentha oil as some short covering is anticipated following lower production

As some short covering is anticipated in the aftermath of a reduced production estimate, mentha oil yesterday settled up 1.3% at 976.2. The sowing efforts are likely to be negatively impacted by the predicted above-normal temperatures during April and May, which will support the firmness in prices. Mentha exports fell by 10.67% to 2,227.55 tonnes between April and February 2023, compared to 2,493.53 tonnes exported between April and February 2022.

Mentha exports fell by 9.62% in February 2023 from 233.21 tonnes in January 2023 to around 210.78 tonnes. Mentha exports increased by 33.49% from 157.90 tonnes in February 2022 to around 210.78 tonnes in February 2023. Bans on gutkha and pan masala have been enacted in numerous states, which has decreased demand from the pan masala sector.

The yields were lower last year, which had an impact on production, but the area remained nearly identical. Mentha oil production in 2020–21 was at an all-time high. Due to a sharp reduction in area and loss in yields as a result of extreme summer heat, production is expected to decrease to around 46,238 MT in the current year.

Mentha oil increased by 11.3 rupees to close at 1143.5 rupees per 360 kilograms on the Sambhal spot market. Technically, the market is experiencing new buying as open interest increased by 5.14% to settle at 695 while prices increased by 12.5 rupees. Mentha oil is now receiving support at 966.2, and a move below that level could result in a test of 956.3 levels. On the other hand, a move above that level could result in a test of 991.7 levels.

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