Indicus price monitor

Rapeseed-mustard is an important oilseed for India. The low output in 2011-12 had seen high inflation through the past year. In general, the policy of increasing minimum support prices to encourage production has also led to price pressures. Its MSP has increased from Rs 1,830 a quintal in 2008-09 to Rs 3,000 a quintal in 2012-13. At the same time, a 30 per cent import duty on oilseeds has kept imports under check.

The third Advance Estimates of the rabi crop set production at 74.37 million tonnes in 2012-13, 12.6 per cent higher than the previous year's. Yet, supply lags the high demand for oil and the average all-India retail price of packed mustard oil has been steadily increasing for the past two years-from Rs 63.05 a kg in May 2010 to peak this February at Rs 105.53 a kg. Prices have since settled slightly lower, currently at Rs 99.93 a kg. It is unlikely domestic prices will cool significantly over the year.

Available at http://www.indicus.net/ IndianEconomy/inflation