Mustard prices may top Rs 4,000 a quintal in the spot market in the next couple of sessions as farmers hold back their produce. Higher demand and lower arrivals are also expected to boost prices.

“Farmers have clamped down mustard looking for higher returns, said Mr Ankit Bafrna, a trader in Neemuch.

He saidthat depleting stocks and delayed sowing of soyabean will add to the bullish trend as delay in sowing of soyabean will also delay sowing of mustard seeds that are normally sown in October.

Though Mandsaur mandi remained closed on account of local holiday on Thursday, in private trading mustard seeds ruled almost Rs 60-70 higher at Rs 3,800 a quintal. Similarly in Neemuch, mustard ruled at Rs 3,800, while in Indore and Jaipur mandis, it ruled at Rs 3,800-3,900.

Compared with prices in the physical market, mustard seeds in the futures are almost Rs 200 a quintal higher. With robust buying support, July and August contracts on the NCDEX closed at Rs 4,042 (up Rs 74) and Rs 4,104 (up Rs 66). Plant deliveries in mustard for Jaipur line also ruled higher at Rs 4,050 a quintal (up Rs 60) on improved buying support from the crushers.

Arrival in Madhya Pradesh declined to around 2,000 bags against 25,000 bags in Rajasthan.

Monsoon showers in the past two-three days have lifted demand for mustard and its oil in mandis across Madhya Pradesh and Rajasthan.

With demand gaining momentum from pickle manufacturers, the rally continues in mustard oil for the past few days with its price at Indore mandis being quoted at Rs 765 for 10 kg on Thursday. Compared with last week’s prices, , mustard oil in Indore mandis is up Rs 5, while it rose Rs 15 at Jaipur and Rs 25 in Gujarat.

According to Mr Kamlesh Nahata, a Neemuch-based trader, the bullish trend will continue with further rise in demand and decline in arrivals in the coming days. Besides, demand from the pickle manufacturers, consumption of mustard oil during the rainy season increases in northern States and it would further push up prices in the coming days, said another trader from Mandsaur.

(This article was published on July 5, 2012)
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