Rmseed On NCDEX Settled Down -1.37% At 3892



Rmseed on NCDEX settled down -1.37% at 3892 tracking weakness in spot demand despite of lower stockpiles. Prices also dropped due to subdued demand from crushers as spot mustard seed prices have rallied by nearly 5% in recent times due to which crushing is in disparity of around Rs 1,041 per ton. Rmseed arrivals were low at 345,000 bags as against 450,00 bags on previous day. Also demand of mustard oil is fading at higher level as it is trading at a premium of Rs 11 per kilogram over soy oil which prompted retail consumers to switch to cheaper alternatives. India is expected to produce around 6.5-7 million tonnes (mt) of rape mustard seeds in 2016-17 as compared to 5.8 mt produced in 2015-16 due to higher acreage and improving productivity. 

The carry-forward stock from the previous season was around 0.15 mt. The Ministry of Agriculture expects 8.5 mt of mustard seeds to be produced in the current rabi season against 6.8 mt a year ago, as per its 4th advanced estimates. Higher price levels seen before sowing, favourable weather and a hike of over 10.4 per cent in MSP to Rs. 3,700/Q (including Rs. 100 bonus) explain the increase in acreage by over 9 per cent to 7.05 million hectares. Initial estimates show that arrivals this year are going to be better than last year. Increasing arrivals will put downward pressure and a price correction is likely.

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