Mentha oil prices dropped as demand was poor due to recession fears

  • Kedia Advisory
  • Commodities News
Mentha oil prices dropped as demand was poor due to recession fears
Credit: © Reuters.

Mentha oil yesterday settled down by -0.32% at 973.1 as demand was poor due to recession fears and global banking turmoil. The collapse of California’s Silicon Valley Bank and troubles at Swiss lender Credit Suisse (SIX: CSGN ) have shaken the financial markets and dampened the outlook for oil consumption. Market participants expect prices to remain under pressure until demand recovers and market sentiment improves.

Many states have seen gutkha and pan masala bans which have seen a lower demand from the pan masala industry. The production of Mentha oil was historically high in 2020-21, the area remained almost similar last year but the yields were lower which affected the production. In the current year, production is to fall to around 46,238 MT due to a sharp fall in area and loss in yields following severe summer heat. which will come close to 14% down in the year 20-21. In the Sambhal spot market, Mentha oil gained by 5 Rupees to end at 1148.5 Rupees per 360 kgs.

Technically market is under fresh selling as the market has witnessed a gain in open interest by 1.44% to settle at 705 while prices are down -3.1 rupees, now Mentha oil is getting support at 967.2 and below same could see a test of 961.3 levels, and resistance is now likely to be seen at 981.9, a move above could see prices testing 990.7.

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