Mumbai (commoditiescontrol) - Mustard Seed market traded higher this week on buying interest at lower level.
Mustard seed witnessed uptrend in spot and futures market this week, while prices of by-products also rallied on improving demand.
Mustard seed prices gained nearly 3.40 percent this week in benchmark Jaipur market of Rajasthan, on account of improving demand at lower level.
Long term out-look for mustard seed seen dismal as production is expected at 69.25 lakh tonnes, according to MOPA association, and the same is higher than market expectation of 65-67 lakh tonnes. Last year production was 55 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 favorable weather condition after good monsoon season last year.
Weather forecast suggests that there are chances of light rains from 17th to 19th March in isolated places of Rajasthan which is likely to delay harvesting which is supporting mustard prices.
Arrivals of mustard seed are likely to increase substantially from 1st of April, till that time around ninety percent of the crop will get harvested which will weigh on mustard seed prices.
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 at higher level so crushers are not willing to procure mustard seed at higher level.
Mustard oil prices are still trading Rs 7/kg premium to refined soy oil so most of the retail demand has shifted to soy oil and consumers are ready to pay only Rs 3-4/kg premium for mustard oil.
In addition to it, blending of mustard oil likely to improve in coming weeks as other oil like palm and canola are available at cheaper rates and seen more profitable in adulateration.
Demand for the other by-product mustard cake is as per requirement from local cattle feed manufacturer due to low price gap with soybean meal, which is also diverting buyers to other cheap available sources.
Currently price gap between mustard meal and soybean meal in local markets is around Rs 8,700 per tonnes, while prices were trading at $232 per tonne FAS kandla in international markets against $216 Hamburg ex. Mill(Apr) which is in disparity of $16.
In futures market this week, mustard seed prices most active April contract dropped 1.09 percent on the National Commodity & Derivatives Exchange Ltd (NCDEX), while forward May contract was higher 0.93 percent.
In coming week, mustard seed prices likely to trade range bound with negative sentiment as arrivals are expected to rise while demand continues to laggard at higher level.
NEXT WEEK: Outlook for oilseed market will focus only on demand for by-products.
(By Commoditiescontrol Bureau; +91-22-40015516)