MUMBAI (commoditiescontrol) - Indian Mustard seed market traded lower due to weak demand for by-products during the week ending May 20, 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 60 to last trade at Rs 3,790/100kg in benchmark Jaipur market of Rajasthan on account of weak demand from local millers. During the week, seed arrivals hovered between 2.45 lakh bags to 2.65 lakh bags (85kg each) against 2.65 to 2.80 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. The Goods and Services Tax (GST) council of India has imposed five percent tax on mustard seed other than seed quality. Seed quality means mustard seed that is used for sowing. In futures market this week, mustard seed prices most active June contract declined by 2.33 percent on the National Commodity & Derivatives Exchange Ltd (NCDEX), while July contract was also lower by 2.10 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 8.50 /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 10 to trade at Rs 718/10kg. 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 which is cheaper than mustard oil so most of the refineries are using palm in adulteration of mustard oil as their profit margin increases. 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. The Goods and Services Tax (GST) council of India has imposed five percent tax on mustard oil. 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 discount in recent times to Rs 190 /100kgs, 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 1,790/100kg. 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 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)
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