MUMBAI (Commodities control) - Indian Mustard Complex traded lower due to weak demand for by-products during the week ending May 27, 2017.
MUSTARD SEED:
Mustard seed prices during the start of the week declined and maintained its negative trajectory throughout to close lower by Rs 100 at Rs 3,695/100 kg in benchmark Jaipur market of Rajasthan on account of weak demand from local millers.
During the week, seed arrivals hovered between 2.60 lakh bags to 2.65 lakh bags (85 kg each) against 2.45 to 2.65 a week ago.
For the very first time the mustard seed prices dropped below MSP of Rs 3,700/100kg on account of sluggish demand from processors. However, it is likely that farmers selling may slow down since price have dropped below MSP limiting the downfall.
In futures market this week, mustard seed prices most active June contract declined by 2.11 percent on the National Commodity & Derivatives Exchange Ltd (NCDEX), while July contract was also lower by 1.90 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 7 /10kg and due to the ongoing of summers which changes the consumption pattern. Mustard oil price at the benchmark Jaipur market has declined by Rs 16 to trade at Rs 702/10kg.
Most of the oil millers have sufficient stock in their inventory to meet the near term requirement and most of the refineries are using palm in adulteration of mustard oil to increase their profit margin.
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.
The only thing that can revive the demand in mustard oil is the timely arrival of monsoon as the consumption of mustard oil increases during rainy season.
MUSTARD CAKE :
Mustard cake was trading at a discount of Rs 425/100 kgs 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 discount to Rs 135 /100kgs in May, the feed manufactures preference has shifted to cotton oil cake due to which the mustard cake prices has declined by Rs 50 to trade at Rs 1,740/100kg.
However, due to higher disparity in Crushing, the crushing plants are working on need basis, limiting the availability of Mustard cake in the market. Thus, extending a support for mustard cake prices.
In the coming 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)