MUMBAI (commoditiescontrol) - Indian Mustard seed market traded lower due to weak demand for by-products during the week ending May 6, 2017.
MUSTARD SEED:
Mustard seed prices during the start of the week declined and maintained its negative trajectory throughout the week to close lower by Rs 75 to last trade at Rs 3,755/100kg in benchmark Jaipur market of Rajasthan on account of weak demand from local millers.
During the week, seed arrivals hovered between 2.70 lakh bags to 2.90 lakh bags (85kg) against 2.25 to 4.45 a week ago as farmers were reluctant sellers at the then current prices.
Arrivals have declined compared to previous week but prices have also decline which shows that there is very poor demand from processors on account of low off take of mustard oil and mustard oil cake.
Disparity in crushing and less margins on sale of by products have kept the Crushers on the side-line in buying bulk inventory. Trade sources believe mustard seed prices may not drop below MSP Rs 3700 / 100kg. A drop to Rs 3750 – Rs 3700 /100kg may see active bulk buyers in the market.
In futures market this week, mustard seed prices most active May contract declined by 0.93 percent on the National Commodity & Derivatives Exchange Ltd (NCDEX), while June contract was also lower by 0.85 percent.
MUSTARD OIL :
Demand of Mustard kachhi ghani oil is likely to remain subdued in near future, on account of shift in the usage to soy oil, as the former is trading at a premium of Rs 9 /10kg and due to the ongoing of summers which changes the consumption pattern.
Most of the oil millers have sufficient stock in their inventory so that they can meet the near term requirement and also the palm oil is available in sufficient quantity so most of the refineries are using palm in adulteration of mustard oil.
Adulteration of mustard oil has reduced the demand of mustard kacchi ghani oil due to which around eighty percent of the oil millers have shut down their crushing operations.
MUSTARD CAKE :
Mustard cake was trading at a discount of Rs 425 /100kgs as on 1st April to Cotton oil cake, attracting the local cattle feed manufactures to consume more of Mustard cake in the feed mix. However, with the drop in this spread in last couple of days to Rs 130 /100kgs, the feed manufactures preference has shifted again to Mustard cake.
However, due to higher disparity in Crushing, the production plants are working on need basis, limiting the availability of Mustard cake in the market. Thus, extending a support for Mustard cake & oil prices.
In the following week, Mustard seed & By products may trade in a range on good demand at lower prices and higher supplies to cap any upside.
(By Commoditiescontrol Bureau; +91-22-40015516)
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