Prices soften as average daily arrival of mustard reaches 8 lakh bags at national level
04-Mar-2025 01:24 PM
The current situation in the mustard market shows that prices are softening due to a significant increase in supply as the harvest season progresses. Here's a breakdown of the key points from the situation:
Increased Arrivals: The average daily arrival of mustard has reached 8 lakh bags across major producing states, contributing to a rise in supply in the market. This has led to downward pressure on prices due to an oversupply and insufficient purchasing activity.
Regional Supply Breakdown:
- Rajasthan: 3.50 lakh bags daily
- Madhya Pradesh & Gujarat: 1.50 lakh bags each
- Uttar Pradesh: 1.00 lakh bags
- Other states: 50,000 bags
Delayed Harvest: The mustard harvest started about 15 days later than usual, but the pace of arrivals has now picked up, leading to increased supply.
Price Softening: The wholesale price of mustard with 42% oil content has dropped by Rs 150 to Rs 6150 per quintal as of March 3. This could continue to soften further due to the continued arrival of fresh mustard crops.
Sowing Area Decrease: Although the mustard harvest is higher, it was planted on a smaller area this season—98 lakh hectares compared to 101 lakh hectares last season. This may limit the overall supply in the long term.
Oil Content & Recovery Rate: A positive aspect for the mustard industry is that the oil content has increased by about 1% this season, which is expected to result in higher oil production. The recovery rate for mustard oil is also higher than last season, which could benefit producers and millers.
Market Interest: As prices soften, the interest of millers and traders is likely to increase, which could stabilize the market in the coming weeks.
Price of Mustard Oil and Cake: The price of Kachi Ghani mustard oil stands at Rs 132 per kg, and mustard cake is priced at Rs 2050 per quintal.
In summary, while the mustard market is experiencing a short-term price decline due to higher supply, the increase in oil content and recovery rates could provide long-term benefits to producers. Millers and traders might become more interested in purchasing as prices soften, which could lead to a more stable market in the near future.