1. Commodity News

Bird’s Eye View of Domestic & Overseas Mustard Markets

Abhijeet Banerjee
Abhijeet Banerjee

Mustard markets in the country had traded with a positive tone during the entire week.The grades of NCDEX quality mustard seed have appreciated by nearly Rs.100-125/qtl over previous week. Markets were firm mainly because of gains in edible oils like Soya oil, Mustard oil and Palm oil.

Gains in soybean prices added to the upward trend. The arrivals are minimal these days. The new arrivals in Kota region has started but this is a basically a short crop therefore unable to influence much against the upside price movement.

However the harvested supplies from other regions of Rajasthan shall increase by March third weak, and gather momentum April onwards. This implies that prices may remain under pressure during April and May months.

The recent rains in producing regions of Rajasthan are now seen beneficial for the standing crop. The new crop is expected to be above last year as understood from the planted area which is better the previous season so far.

The latest availablegovernment data shows that the planted area in Mustard or RM seed had reached 73.94 hectares against the sown area of 2020-21, which was 69.08 lakh hectares in 2019-20 corresponding period.Therefore year on year, the planted area of mustard has increased by 7 percent approximately.

The mustard crop continues providing better prices to farmers than the MSP till now. Farmers had received handsome profits from this crop as mustard prices had registered significant appreciation in 2020.

 As a result, the motivation to plant more the mustard crop had increased amongst the Indian growers during this planting season.As long the new crop supplies are not increasing significantly, mandi prices may remain stable or slightly firm.

The NAFED has to maintain some buffer against the adverse situation, therefore, may not sell much in the physical trade centers. This will be another factor in preventing any noticeable fall in prices in the short run – say for the next few weeks.

This revision would be 700,000 tons above last month’s forecast and up from 10 million in 2019/20.Demand from the EU nations had been robust till now. The USDA in its forthcoming reports may cut the country’s season-ending stocks to.an 8-year low of 1.2 million tons considering a reduced Canadian canola supply followed by an increase for this year’s trade.

 Statistics Canada has reported that the mid-year canola stocks, as of December 31, were already down by 24 percent from a year earlier.

The Canadian futures market of canola in recent weeks had climbed near the historic high in response to tight ending stocks outlook for the next summer. The USDA has projected China’s rapeseed imports for 2020/21 500,000 tons higher this month to 3 million, which could support a domestic crush level at 15.5 million tons.

Still the estimated supply in China is unlikely to meet the probable gains in consumption. Likewise, EU-27 and UK nations’ rapeseed imports for 2020/21 are seen 200,000 tons higher this month to 6 million, which is slightly lower than the 2019/20 record of 6.25 million. The EU importers in the current marketing year have purchased close to the same quantity as they did a year ago.

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