MUMBAI (Commodities Control)- Mustard seed witnessed downtrend in spot and futures market this week, while prices of by-products also declined on subdued demand.
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Mustard seed prices declined nearly Rs 10 to trade at Rs 3,950/100kg in benchmark Jaipur market of Rajasthan, on account of lacklustre demand. Arrivals hovered between 4 to 4.55 lakh bags (85 kg each) against 3.65 to 4.7 lakh bags, a week ago.
Long term out-look for mustard seed seen dismal as production is expected at 70.50 lakh tonnes, according to COOIT, and the same is higher than market expectation of 65-67 lakh tonnes. Last year production was 67 lakh tonnes.
Apart from big production size, new crop seen better than expected and oil content is said to be 41-42 percent due to favourable weather condition after good monsoon season last year.
Mustard seed prices may remain under pressure in coming weeks as arrivals are likely to rise, whereas demand for mustard oil continues to remain low so crushers are not willing to procure mustard seed at higher level.
Mustard crush parity has declined to Rs 50 per metric tonnes (MT) against Rs 130 on previous session.
The crush parity in the recent weeks has declined significantly due to lacklustre demand in mustard oil and mustard cake.
Buyers are not in a hurry to procure mustard seed due to estimate of higher production and expectations of more correction in prices, however government has already started procurement programme at minimum support price (MSP) under PSS scheme to support prices.
The National Agricultural Cooperative Marketing Federation of India had procured 1,71,991 tonnes of mustard as of 20th April at minimum support price from farmers in Rajasthan, Madhya Pradesh and Haryana, an official with the agency said.
In futures market this week, mustard seed prices most active May contract closed down 0.10 percent at Rs 3,925/100kg on the National Commodity & Derivatives Exchange Ltd (NCDEX).
MUSTARD OIL :
Mustard oil price during the week at the benchmark Jaipur market declined by Rs 5 to trade at Rs 764/10kg on sluggish demand in retail market.
Further there is strong rumour in the market that Indian goverenment may increase the import duty on canola oil as mustard seed loose prices are trading below the MSP at most of the market yards of the country.
Traders are also concerned about the price advantage of mustard oil to soy oil.
As of now, the premium of mustard oil to soy oil is of Rs 1/kg which is supportive for mustard oil and when this premium widens to Rs 14-16/kg then consumers may shift to soy oil which will weigh on mustard oil prices.
Mustard Oil Cake:
Mustard oil cake price declined by Rs 5 during the week to trade at Rs 1,860/100kg amid limited demand from cattle feed manufacturers at higher price level.
Outlook: For the coming week, Mustard Complex is likely to trade range-bound on restricted selling from farmers' end at lower price level while limited demand from millers at higher price level will weigh on mustard prices.
(By Commoditiescontrol Bureau; +91-22-40015516)
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