Mustard Oil Price Trend and Forecast

Mustard Oil Regional Price Overview

Get the latest insights on price movement and trend analysis of Mustard Oil in different regions across the world (Asia, Europe, North America, Latin America, and the Middle East & Africa).

Mustard Oil Price Trend for the Q2 of 2024

In Q2 2024, mustard seed prices in Indian mandis remained below the minimum support price despite government procurement efforts under the price support scheme; this reflected well in the pricing pattern of mustard oil. Traders attributed this trend to a bumper crop and cheaper edible oil imports in the previous sowing season.
 

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Government agencies, including Nafed and the National Cooperative Consumers Federation (NCCF), purchased a fraction of the total oilseed output, primarily in states like Madhya Pradesh, Haryana, and Rajasthan in order to stabilize the market but its effect is yet to be settled in. The agriculture ministry authorized the purchase of a significant portion of the oilseed production under PSS, which is expected to continue until mid-June.

Despite these efforts, government purchases have been insufficient to match the total market arrivals, forcing farmers to sell at prices below MSP. The procurement levels are similar to last year’s, but the profit margins of producers as well as traders have reduced significantly. The situation has worsened due to increased imports of edible oils, facilitated by reduced global prices and lower import duties.

Consequently, retail inflation in the oil and fat category has been negative since early 2023, with a significant decline in mustard oil prices in Q2 2024. Throughout the second quarter, India’s reliance on imported edible oil remains high, covering over half of the country’s consumption needs.

The domestic market's share includes a significant portion of mustard oil, alongside soybean and ground nut oils. However, mustard oil prices in Q2 2024 were pressured downwards due to ample supply from both domestic production and imports, maintaining a trend of subdued prices throughout the quarter.

Analyst Insight

According to Procurement Resource, the price of Mustard Oil is expected to continue its southward trail as the rise in competitive pricing by the traders and producers around the world might further decline the quoted prices of mustard oil.
 

Mustard Oil Price Trend for the Q1 of 2024

Asia

The mustard oil prices in the APAC region showcased a downward trend as the over-functioning of supply chains surpassed the downstream demand for the commodity. In agriculture dependent regions, such as India, the high mustard crop yields increased the domestic supply, affecting the pricing patterns of mustard oil and farmer’s profitability. Concurrently, the strengthening of the Indian Rupee against the US dollar added to the cost of exporting mustard oil.

Additionally, the geopolitical tensions and economic fluctuations also had a significant impact on mustard oil markets. On the other hand, the consumers benefitted from lower prices as they expanded their spending budgets. Additionally, the inventories also swelled up with the loss of exports to Europe and the USA amid the ongoing trade struggles due to the disruption of the Red Sea and Panama Canal routes.

Europe

The mustard oil market faced stringent regulations in Europe due to its high erucic acid content during the first quarter of 2024. While Asian countries like India and Pakistan rely on it for cooking, Europe, along with the USA and Canada, has banned its human consumption due to health concerns. Erucic acid, which is abundant in mustard oil, poses risks to brain health and metabolism, prompting the prohibition.

However, this ban does not extend to its other applications like skincare and other downstream industries. Additionally, the loss of imports from the Asian countries and the re-direction of the Red Sea through the Cape of Good Hope increased the shipment arrival duration and eventually limited the growth of the mustard oil market during the first quarter of 2024.

North America

The mustard oil traders witnessed a bearish tone in the market momentum evident in the pricing trajectory. The traders anticipated that prices could remain flat or even decline due to an oversupply situation during the previous quarters, as the downstream industries seemed reluctant to place bulk orders of the commodity. This anticipation of the traders stood true, and the manufacturing sector struggled with an excessive rise in the inventories. The Penner forecasts a substantial surplus of mustard supplies in the 2024-25 season, with an estimated 275,000 tonnes, the largest in at least a decade.

This surplus is attributed to high stockpiles from the 2023-24 crop season, coupled with sluggish export activity. The high prices of Canadian mustard further dampened buyer enthusiasm, contributing to reduced export projections. Additionally, increased competition from the United States, with a significant surge in mustard production, depreciated the overall dynamics of the market. Additionally, quality issues in the Black Sea region and increased imports of Russian mustard by the European Union further intensified the challenging market conditions.

Analyst Insight

According to Procurement Resource, the price trend of Mustard Oil is expected to attain a bearish tone in the European and North American region while maintaining an uptrend in Asian countries. The ban on mustard oil usage in the US and Europe might reduce its usage in these countries, while the heavy reliance of Asian countries on mustard oil will support its price trend.
 

Mustard Oil Price Trend for the October - December of 2023

Asia

The onset of the holiday season in the Asia-Pacific countries led to a rise in the demand for mustard oil during the initial phase of the last quarter of 2023. However, in anticipation of a steep incline in the rate of procurement of mustard oil by consumers, the manufacturing sector boosted its number of produced units, which did not work in favor of mustard oil prices towards the end of the quarter.

As the quarter progressed gradually, the mustard oil prices began to show slow momentum as the excessive supply surpassed the existing demand. Additionally, in India, due to the upcoming elections, the government of many states offered mustard oil at rates far below the market values, and thus, the mustard oil price trend in Asia wavered at best.

Europe

The initial phase of the fourth quarter did not show any considerable movement in the mustard oil price trend. The positive influence of the festive season and the rise in imports from Ukraine could only support the mustard oil prices during the early stages. The supply of mustard seeds in the region grew profoundly as the quarter progressed and so its presence in the market while the consumer demand remained consistent. Further, the pressure of inflation and the blocking of export routes restricted the growth of mustard oil price trend.

North America

Till the third quarter, the US market showcased significant appreciation in the mustard oil price trend, but the momentum of the market was slightly lost in the last quarter. The mustard oil price trend grew but at a much slower pace. Further, the excessive influx of imports from Asian countries, which increased the competitiveness of the market, forced the domestic producers to keep their quoted prices in check in order to maintain their sales numbers.

Analyst Insight

According to Procurement Resource, the price trend of Mustard Oil are expected to be based on the global import-export balance along with the equalization of the regional supply-demand balance.
 

Mustard Oil Price Trend for the July - September of 2023

Asia

The mustard oil price trend enjoyed the upswing as the monsoon season got delayed in the Asian countries, leading to a significant reduction in its availability. Further, the manufacturing of mustard oil also declined in the region, creating a significant scarcity of the product. On the other hand, the demand for mustard oil inclined gradually, widening the supply-demand gap and thus resulting in the surge in the mustard oil price trend. In addition to this, the region also increased its export volumes and then the onset of festival season helped the market to gain the required momentum.

Europe

Similar to what was observed in the Asia Pacific countries, the depleted level of stockpiles and surplus demand for mustard oil helped in the surge in the mustard oil price trend in the third quarter of 2023. The region also benefitted with the arrival of festival season in the Asian countries, giving its export market a boost and the mustard oil price graph its northwards momentum. In all, the rise in both domestic and overseas demand and slow supply resulted in the rise in the mustard oil price trend.

North America

The North American market mimicked the trend observed in the Asian and European countries. In the third quarter, the region experienced a remarkable increase in the demand for mustard oil. In addition to the growing appetite of consumers, the substantial rise in the cost of production due to the hike in transportation rates resulted in the surge in mustard oil price trend. However, the supply chains here also struggled with lower agricultural produce and adverse weather conditions.

Analyst Insight

According to Procurement Resource, the price trend of Mustard Oil are estimated to follow an inclining trajectory as despite lower production, its demand is expected to grow in the upcoming quarters.
 

Mustard Oil Price Trend for the First Half of 2023

In the first two quarters of 2023, the prices of mustard oil suffered, especially in Asian countries. The prices continued the falling trend as the market suffered from high rates of production while the demand from domestic as well as international consumers remained low. Amid this gradual decline in the prices, many traders were hoarding the produce in hopes of bringing it into the market when the market sentiments improved, leading to a spike in the level of inventories, hampering the growth of the mustard oil price trend.

In addition to this, the consumer sector also seemed hesitant to order the product in bulk, and the cost support from the mustard seed sector also fluctuated heavily, declining the price trend of mustard oil. In India, the government advised many manufacturers strictly to reduce their MRP rates by Rs 8-10 per liter, indicating the fall in the market of mustard oil.

Analyst Insight

According to Procurement Resource, the price of Mustard Oil is estimated to stumble as the rates of production seem to surpass the demand for mustard oil in both domestic and international markets.

Procurement Resource provides latest prices of Mustard Oil. Each price database is tied to a user-friendly graphing tool dating back to 2014, which provides a range of functionalities: configuration of price series over user defined time period; comparison of product movements across countries; customisation of price currencies and unit; extraction of price data as excel files to be used offline.