Mustard Seeds Under Pressure as Crude Oil Slumps and Indian Arrivals Rise
Indian mustard seed prices weaken on heavy arrivals, higher edible oil imports and falling crude. Outlook: rangebound to slightly softer in the next 2–4 weeks.
Prices & Market Snapshot
Across key wholesale markets in southern Haryana, mustard seed and mustard oil posted clear day‑on‑day declines. At Charkhi Dadri, mustard seed eased by about EUR 0.95 per 100 kg to roughly EUR 69–70, while mustard oil expeller dropped around EUR 1.90 to about EUR 144–145 per 100 kg. Mustard cake slipped by roughly EUR 0.47 to about EUR 30–31 per 100 kg, indicating pressure across the full value chain.
Other centres mirrored this weakness. Hansi saw mustard seed trading around EUR 69–70 per 100 kg, while Bhiwani recorded a roughly EUR 1.90 decline in mustard oil expeller to around EUR 145–146 per 100 kg alongside softer seed values near EUR 69–70. Narnaul was hit hardest, with mustard seed dropping by about EUR 1.40 per 100 kg into a broad EUR 60–70 range and mustard oil falling around EUR 2.80 per 100 kg.
Further afield, Jaipur’s conditioned mustard eased only marginally (around EUR 0.24 per 100 kg) to approximately EUR 75–76, while Hapur in Uttar Pradesh held steady near EUR 72–73 thanks to continued oil mill buying. In the premium cold‑pressed segment, kachi ghani mustard oil traded mixed: Kolkata strengthened to roughly EUR 15–16 per 10 kg, Bharatpur softened slightly, and Kota remained broadly unchanged near EUR 15–16 per 10 kg. Mustard cake at Bharatpur actually firmed to around EUR 32–33 per 100 kg on improved feed demand.
Supply & Demand Drivers
The current down‑move is fundamentally rooted in heavy near‑term supply. Daily mustard arrivals in India have increased from about 700,000 to 800,000 bags, signalling aggressive farmer selling and ample pipeline stocks. Simultaneously, India’s edible oil imports in April rose 34% year‑on‑year to 1.31 million tonnes, with cumulative imports for the current oil year (November–April) up 13% at 7.94 million tonnes, further easing domestic supply tightness.
On the demand side, edible oil consumption remains solid but is increasingly satisfied by cheaper imported oils such as palm and soyoil, especially when global prices fall in tandem with crude. Domestic crushing demand for mustard — both for edible oil and protein‑rich cake used in feed rations — provides a floor but is currently insufficient to offset the combined weight of larger arrivals and higher imports. Feed demand is more supportive, as reflected in firmer cake prices at Bharatpur, but this mostly cushions the downside rather than reversing the trend.
Fundamentals & External Influences
The principal external driver is the sharp correction in crude oil. Market expectations that the Hormuz Strait could be fully reopened under an interim US–Iran “60 Deal” have pulled international crude benchmarks down to about EUR 83–85 per barrel. With biofuel blending economics tightly linked to crude, the relative value of vegetable oils has weakened, exerting broad pressure on the global oilseed complex, including mustard.
Malaysian palm oil futures have followed crude lower, and this spillover is visible in India, where imported palm and soy products set the price ceiling for domestic oils. As global benchmarks retreat, mustard oil must stay competitive, forcing crushers and traders to accept lower seed and oil prices. Speculative length in vegetable oils is also being unwound, adding to short‑term volatility. In this context, mustard’s relative advantage lies in strong domestic consumption and diversified demand (edible, industrial and feed), which helps moderate the sell‑off compared with more export‑dependent oils.
Weather & Crop Outlook
Weather in India’s main mustard‑growing belt (Rajasthan, Haryana, Uttar Pradesh) is currently not the primary market driver, with harvest largely completed and arrivals flowing freely into the market. Near‑term forecasts suggest seasonally warm, mostly dry conditions, which should not materially disrupt supply chains or stored stocks. In the absence of a weather shock, price action is expected to remain dominated by macro‑energy trends, import parity and policy expectations.
Looking ahead, monsoon performance and subsequent planting decisions for the next rabi season will be closely watched, but they will influence medium‑term price expectations rather than immediate spot levels. For now, the market’s focus stays firmly on arrivals, inventories and international vegoil benchmarks.
Short‑Term Price Outlook (2–4 Weeks)
- Bias: Rangebound to slightly weaker mustard seed prices in the coming 2–4 weeks, assuming crude oil remains under pressure and Hormuz flows normalise.
- Downside support: Robust domestic crushing and feed demand, plus some resilience in premium kachi ghani oil segments, should limit extreme downside.
- Risks to the outlook: A sharp rebound in crude oil or an unexpected disruption in global vegoil supply could quickly stabilise or lift mustard prices; conversely, further downside in crude or additional import liberalisation would reinforce the bearish tone.
Trading & Procurement Recommendations
- Crushers: Use current weakness to secure staggered seed coverage rather than front‑loading purchases. Focus on markets like Narnaul and Bhiwani where discounts are steepest, but avoid over‑hedging in case crude corrects higher.
- Exporters: With New Delhi FOB prices for mustard seeds around EUR 0.70–1.00/kg depending on type and grade, explore forward sales where margins against competing oils remain positive. Lock in logistics early, as volatility in freight may accompany any further geopolitical shifts.
- Feed manufacturers: Take advantage of relatively firm but still competitive mustard cake prices by extending coverage modestly; the risk of sharp upside appears limited in the very near term given abundant seed availability.
- Industrial users & refiners: Maintain a flexible procurement strategy, blending mustard oil with cheaper imported oils where acceptable to optimise costs while keeping an eye on any policy moves on import duties.