Global Mustard Oil Prices are Expected to Surge in Q2 2024: Factors Driving the Increase
Global Mustard Oil Prices are Expected to Surge in Q2 2024: Factors Driving the Increase

Global Mustard Oil Prices are Expected to Surge in Q2 2024: Factors Driving the Increase

  • 01-May-2024 3:09 PM
  • Journalist: Kim Chul Son

Considering the market activity within producing nations, the prices of Mustard seed and its downstream product, Mustard Oil, are expected to rise throughout the second quarter of 2024. In a recent satellite survey, various market experts' projections suggest that the current market may witness a steady drop in production for the 2023-2024 crop season. Traders note that despite a drop in the prices of Mustard seed in the past few months, higher costs of processing, packaging, and transportation have resulted in an overall increase in the values of end-products such as Mustard Oil. Moreover, sportingly, the rising prices of gasoline, including crude oil, spurred by concerns over suppliers and geopolitical risks, including wars in Ukraine and the Middle East, have contributed to the increase in Mustard Oil prices. The considerable rise in crude oil prices has pushed overall prices upwards, affecting the global availability of materials, including edible oils such as Mustard Oil across trading nations. Additionally, increased demand and heightened competition from other vegetable oils are expected to keep Mustard Oil prices on the upper side. Higher prices of alternative vegetable oils like sunflower or canola have made consumers turn to Mustard Oil as a more affordable alternative, diverting demand towards it. This dynamic interplay among different vegetable oils is contributing to ongoing price adjustments in the sunflower oil market.

However, various market players within importing nations stated that due to normal production and supplies for edible oil from producing nations ahead of favorable weather conditions, coupled with continuous rise in downstream consumption, prices across the international market have decreased slightly in the last three to four months, including Mustard Oil. However, consumers in these countries and regions did not benefit from this decrease due to the increase in the exchange rates of the dollar compared to the currencies of producing regions since the beginning of the first quarter of 2024, resulting in an overall price rise.

Additionally, traders anticipate the imminent harvest of the Mustard crop in the current harvesting period, expecting more availability of Mustard seed and its respective oil, such as Mustard Oil, resulting in reduced prices and excessive availability of materials. As a result, trades across importing nations have started to place bulk orders in the wake of higher availability of materials. However, with global fluctuations in currencies supported by heightened production costs, including higher prices for labor and energy, the overall production cost of Mustard Oil has increased. While slight increases in freight charges further contribute to the overall price rise of trading Mustard Oil to importing nations, thereby contributing to an overall price rise as the second quarter of 2024 commences.

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