MENTHA OIL

Summary
Last year, Mentha oil prices has dropped by 8.53 i.e by Rs. 146.10 to settle at 1566.10.

MCX MENTHAOIL
Open High Low Close Pr. Close Rs. Chg % Chg Volume Open Int.
1675.00 1832.00 1103.00 1566.10 1712.20 -146.10 -8.53 297560 824

KEDIA ADVISORY - Menthaoil Outlook – February 2019 1

Key Highlights

 Production prospect clarity shall emerge after few weeks but till then sentiments might
remain eased as most participants shall prefer trading plan for the new season crop.

 Fall in carry forward stocks, over last year could support prices in medium term. We had
seen historical low carryover stocks of Mentha oil in domestic markets two years back,
and in 2018 also stocks to use ratio is tightened, eventually making the commodity
vulnerable to any supply disruptions.

 High prices seen last year have ensured better sowing this year. A sharp rise in Mentha
oil prices towards 1650-1700 level seems to have encouraged farmers with the short-
duration mint crop this summer.

 The global Menthol market is valued at 3850 million US$ in 2017 and will reach 5590 million
US$ by the end of 2025, growing at a CAGR of 4.8% during 2018-2025.

 Demand is expected to drop as historical trends around elections in the last few years
suggest that FMCG industry demonstrates stable to marginally lower growth in the
election year.

 Mentha prices has seen a sharp increase of 55% from the bottom and would impact raw
material costs of FMCG companies like Emami, Patanjali, Marico, Bajaj and so on.

 Nielsen expects the fast moving consumer goods (FMCG) industry to grow between 11-
12 percent in 2019 versus 13.8 percent growth seen last year.

 Sowing of Mentha, largely concentrated in Uttar Pradesh for long, began early February
and will continue for 4-6 weeks. The crop will be harvested from April.

 Under Key Government Initiatives Aroma Mission launched for fueling growth of aroma
industry in sept 2018 where by Govt. to allocate INR 2 Bn to support manufacturing of
perfumes, essential oils etc. in budget 2018 this will support the production.

KEDIA ADVISORY - Menthaoil Outlook – February 2019 2

Technical

o Broadly triangle pattern is seen shows upside will be capped 1695-1700 level. As long as
prices are trading below same can see support at 1470 and below can see support at
1370 level.
o Open interest is only 1238 combining 1st 3-months indicates no major market participation
as of now.
o MACD is improving after he initial fall but remain in Negative zone still
o While concerns are from volume side as since September volume are decreasing and
trading at 3080 far below 52-weeks average.
o In our early outlook in the absents of sowing/export demand data we see Mentha oil
should trade below 1700-1750 levels as shown in chart.
o While support initially looks near towards 1370 level.

Initial Outlook
SELL MENTHA OIL 1670-1700 SL ABV 1800 TGT 1540-1470.

MCX MENTHAOIL
Open Interest Volume Volume
Contract Spot Rate Open High Low Close Pr. Close Rs Chg % Chg
(Lots) (Lots) (In 000's)
28-Feb-19 1797.90 1662.10 1663.50 1634.00 1659.90 1652.50 7.40 0.45 770 866 311.760 KGS
29-Mar-19 1797.90 1615.20 1624.00 1597.00 1621.30 1614.00 7.30 0.45 373 183 65.880 KGS
30-Apr-19 1797.90 1519.00 1519.00 1509.90 1511.50 1514.60 -3.10 -0.20 39 12 4.320 KGS
31-May-19 1797.90 1280.00 1280.00 1280.00 1280.00 1255.00 25.00 1.99 11 1 0.360 KGS
28-Jun-19 1797.90 1180.00 1198.00 1179.90 1190.30 1194.80 -4.50 -0.38 72 9 3.240 KGS

SPREAD REPORT - MENTHA OIL

MCX CLOSE Spread History
MENTHAOIL SPOT
FEB MAR APR Max Min
1797.90 1659.90 1621.30 1511.50 54.30 -233.00
MAR-FEB APR-MAR APR-FEB Average
Spread Update
-38.60 -109.80 -148.40 -17.00

KEDIA ADVISORY - Menthaoil Outlook – February 2019 3

 MCX MENTHAOIL 28FEB2019
Moving Averages SMA EMA SMA SIGNAL EMA SIGNAL Price Performance
5 Days 1605.4 1606.9 BUY BUY Period Performance
10 Days 1591.4 1593.4 BUY BUY 1 Week 6.38
20 Days 1561.6 1581.4 BUY BUY 1 Month 4.03
50 Days 1558.6 1586.8 BUY BUY 3 Month -3.90
100 Days 1638.1 1592.2 BUY BUY 6 Month 0.09
200 Days 1529.2 1547.9 BUY BUY 1 Year 16.71

Technical Indicator Daily Pivot Points Classic

Name Value Name Value Resistance Support
RSI(14) 57.25 Williams%R -33.17 1780.0 1560.0
CCI(14) 126.75 UltimateOsc 50.79 1920.0 1440.0
ATR(14) 38.46 Stochastic 2100.0 1300.0
MACD(12,26) 10.20 %K 77.93
Pivot Point 1620.0
ADX(14) 15.57 %D 80.95

Seasonality

MENTHA PRICE MOVEMENT SINCE 2010

JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC Growth
584.6 578.5 617.4 780.1 720.9 719.2 683.8 760.2 862.9 1138.2 1218.5 1173.4 585.10
2010
-0.63 -1.04 6.72 26.35 -7.59 -0.24 -4.92 11.17 13.51 31.90 7.05 -3.70 99.46
1132.7 1121.5 1240.4 1069.8 866.3 913.0 1063.0 1150.0 1378.8 1318.9 1331.7 1306.7 133.30
2011
-3.47 -0.99 10.60 -13.75 -19.02 5.39 16.43 8.18 19.90 -4.34 0.97 -1.88 11.36
1565.9 2005.7 2453.8 1539.7 1198.1 1222.5 1308.7 1330.7 1162.2 1173.8 1351.4 1416.2 109.50
2012
19.84 28.09 22.34 -37.25 -22.19 2.04 7.05 1.68 -12.66 1.00 15.13 4.80 8.38
1473.5 1385.0 1215.6 1092.9 1041.2 1097.5 964.4 1037.0 971.8 941.0 970.5 942.6 -473.60
2013
4.05 -6.01 -12.23 -10.09 -4.73 5.41 -12.13 7.53 -6.29 -3.17 3.13 -2.87 -33.44
823.0 793.3 895.1 838.5 901.5 798.6 777.7 684.4 750.6 767.8 780.5 836.9 -105.70
2014
-12.69 -3.61 12.83 -6.32 7.51 -11.41 -2.62 -12.00 9.67 2.29 1.65 7.23 -11.21
857.4 782.0 723.6 998.9 1028.8 1152.9 1028.8 1078.8 1027.8 1033.3 1044.7 904.7 67.80
2015
2.45 -8.79 -7.47 38.05 2.99 12.06 -10.76 4.86 -4.73 0.54 1.10 -13.40 8.10
1015.7 1062.6 997.4 997.5 1003.8 832.8 906.4 905.3 868.1 926.3 959.6 1006.2 101.50
2016
12.27 4.62 -6.14 0.01 0.63 -17.04 8.84 -0.12 -4.11 6.70 3.59 4.86 11.22
1123.9 1148.5 1129.5 925.9 1062.2 1005.1 1210.5 1347.6 1330.7 1456.1 1985.6 1970.9 964.70
2017
11.70 2.19 -1.65 -18.03 14.72 -5.38 20.44 11.33 -1.25 9.42 36.36 -0.74 95.88
1539.9 1295.4 1305.5 1281.9 1124.9 1219.5 1552.6 1812.4 1681.0 1815.2 1848.0 1566.1 -404.80
2018
-21.87 -15.88 0.78 -1.81 -12.25 8.41 27.31 16.73 -7.25 7.98 1.81 -15.25 -20.54
1555.9 -10.20
2019
-0.65 -0.65

Average 1.10 -0.16 2.87 -2.54 -4.44 -0.08 5.52 5.49 0.75 5.81 7.87 -2.33 Average

KEDIA ADVISORY - Menthaoil Outlook – February 2019 4

 KEDIA STOCKS & COMMODITIES RESEARCH PVT LTD.
Mumbai. INDIA.

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KEDIA ADVISORY - Menthaoil Outlook – February 2019 5