2023: Unraveling Mustard Market Scenario During August Week 4

The Mustard market in Jaipur witnessed an interesting week that commenced with hope but concluded with a slight price dip. From opening at Rs. 5900 per quintal on 21 August 2023 to closing at Rs. 5875 per quintal on 26 August 2023, the market has experienced a downward trajectory. Let’s delve into the recent market data, exploring the factors that influenced the Mustard price fluctuation and various components that shape the market and its potential future trajectory.

Fluctuating Price Trends

Last week, the Mustard market experienced a decline of Rs. 25 per quintal which can be attributed to the lack of demand, particularly for Mustard Oil. Mustard Oil demand stagnancy impacted Mustard demand directly, leading to a downward price pressure.

Steady Mustard Oil Cake Demand

While Mustard Oil demand has been lacklustre, Mustard Oil Cake demand has remained steady. An interesting factor contributing to Mustard Cake’s demand stability is its strong performance in export deals. This consistency has played a crucial role in preventing a sharper Mustard price decline. Countries like South Korea, Thailand, and Vietnam have shown good Mustard Cake demand. While mills are operating diligently, the challenge lies in the shortage of goods to fulfil the commitments made in these deals.

Supply-Demand Discrepancy

The Mustard supply scene is somewhat hazy. August 2023 has seen 4.85 lakh tons of Mustard arrivals so far. However, confusion persists due to a significant gap between supply-demand data and the actual records. This discrepancy makes it hard to accurately gauge the Mustard production figures.

Mustard oil demand has been sluggish due to the widening price gap with Soybean Oil. Yet, the steady demand over the past months tempers the fear of a drastic decline.

Market Outlook

As August 2023 concludes, the mustard price outlook remains uncertain, with the need for a delicate balance between Mustard production figures and the Soybean Oil demand. The downward Mustard price trend contrasts with the projected strong Mustard Cake demand, which is expected to fulfil export deals. Though the mills are active, there’s a challenge in fulfilling deliveries for pre-existing agreements. This indicates a potential bottleneck in meeting international demand. 

OFB’s Insight

The Mustard market’s recent price turmoil has underscored the complex interplay between demand, supply, and external factors like Soybean Oil prices. While steady Mustard Cake demand and overseas deals offer some stability, addressing the Mustard Oil demand challenges requires a multi-faceted strategy. The coming weeks will likely reveal whether the market can muster up the conditions necessary for a price upturn.