The price of mustard seeds declined significantly during the last week, dropping by more than 3% to settle at levels of 5368. This was mostly brought on by negative elements such as higher carryforward stock, bumper crops, more arrivals, and higher imports of edible oil. In comparison to the typical level of 1.5–1.8 MMT, the carryforward stock of mustard seed is predicted to be in the range of 2.2–2.5 MMT. The current crop size is also anticipated to be larger than last year’s crop since favourable weather and a larger agricultural area increased yield and output. The government estimates the mustard crop to be 12.82 MMT, but several sources estimate the yield to be 12 MMT, up from 11 MMT the previous year.
Farmers are eager to sell their goods at the going rates, therefore the arrival of a mustard seed at the mandis has also increased. On April 23, 2023, it was reported that there were 0.825 million bags arriving each day, down from 0.9 million the day before but still on the rise. Because miller’s and crushers’ demand and the supply of mustard seed have not been able to keep up, the price of mustard seed has been under pressure. Additionally, India imported 5.89 MMT of edible oils in the first five months of the current oil year (November-October), up 25.5% from the same period last year.
Because of the increased imports, there are now more edible oil inventories at the ports and in the pipelines, which has decreased domestic demand for oilseeds like mustard and soybean. However, several supportive factors, like government procurement, high miller demand, and favourable crush margins, are viewed as limiting the decline in mustard seed prices. While HAFED will purchase 20,000 MT at MSP in the mandis, the government has chosen to purchase 1.5 MMT of mustard from farmers in Rajasthan, the state that produces the most mustard in India (40%–45%).
Farmers will receive some assistance from this, and distress selling will be avoided. According to NAFED, 2.57 lakh metric tonnes of mustard has been purchased as of April 21st, 2023, across four states: Haryana, Madhya Pradesh, Gujarat, and Rajasthan. Since millers and crushers are experiencing favourable crush margins for mustard and soybean, demand from them is also anticipated to stay high. Positive margins show that milling and crushing oilseeds is profitable, therefore they will keep purchasing oilseeds from the market.
