Indian Mustardseed Likely To Trade Range Bound Next Week

MUSTARD SEED:

Mustard seed prices during the week closed flat at Rs 3730/100 kgs in the benchmark market of Jaipur amid limited demand at higher level whereas declining supply on restricted farmer selling supporting prices at lower level. During the week, seed arrivals hovered between 1.85 lakh bags to 1.55 lakh bags (85 kg each) against 2.35 to 1.70 a week ago.

During the start of the week, prices were trading firm on account of improved demand from processors, however Midweek, Crushers demand faded at higher price level due to limited sales of mustard oil, leading to a decline and towards the end of the week farmers slowed down the sales of mustard seed in market yards on lower prices.

Any drop in the Mustard seed prices close to the MSP of Rs 3700/100Kgs slows down the farmers selling and increases the buying by the crushers for stocking. Thus, keeping the prices supported near the MSP.

In futures market, Mustard seed prices most active July contract gained by 2.14 percent to trade at Rs 3,570/100kg on the National Commodity & Derivatives Exchange Ltd (NCDEX), while August contract also closed higher by 1.39 percent at Rs 3,628/100kg

As the futures are trading at a discount to spot prices so most of the traders and speculators have created long position as they are anticipating that spot prices are not likely to fall below MSP of Rs 3,700/100kg on account of declining supply so futures prices will trade higher to match up with spot price.

MUSTARD OIL :

Demand of Mustard kachhi ghani oil improved during the week as the monsoon is progressing as forecasted. During monsoon season demand of mustard oil increases by around five to seven percent as end consumers consumes more oil as they like to eat fried foods during rainy season. Mustard oil price during the week at the benchmark Jaipur market gained by Rs 4 to trade at Rs 708/10kg.

Further, price of mustard oil is trading at a premium of Rs 8/kg to soy oil so sharp rally in mustard oil prices is unlikely. The premium of mustard oil should decline to Rs 3-4/kg then only we may see robust demand in mustard oil.

MUSTARD OIL CAKE :

Mustard cake was trading at a discount of Rs 425/100 kgs as on 1st May 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 55 /100kgs, the feed manufactures preference has shifted to cotton oil cake due to which the mustard cake prices has declined by Rs 30 during the week to trade at Rs 1,675/100kg.

Outlook: 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)