Mustard prices up on worry of lower crop

Area sown fell by 5% to 6.3 mha this year as compared to 6.65 mha previous year

Mustard seed output is likely to decline by at least 15 per cent this year on a fall in area sown and reports of crop damage due to ongoing cold weather in major producing states.

Data collated by the Union ministry of agriculture shows the area sown fell by five per cent to 6.3 million hectares this year as compared to 6.65 mha the previous year. A steep fall was reported in Rajasthan and Madhya Pradesh, the two largest producers.

Such estimates have started impacting prices. The oilseed for delivery in January on the National Commodity & Derivatives Exchange rose around 10 per cent in December to trade on Thursday at Rs 4,276 a quintal. Since, November 1, there has been a 13 per cent rise.

“Seed output might fall by 15 per cent on falling acreage and yield,” said Satyanarayan Agarwal, advisor to the Central Organisation for Oil Industry & Trade.

Mustard is entirely a rabi oilseed crop, sown in October–November for harvesting in late-February to early April. Seed output has been inconsistent in the past five years. After a record of 8.18 million tonnes Imt) in 2010-11, it declined to 6.6 mt the following year.

A decline in domestic output would lead to a proportionate rise in import. India currently imports around 60 per cent of its vegetable oil consumption, estimated at 19.5 mt in 2014-15, primarily from Malaysia and Indonesia. Dorab Mistry, Director, Godrej International and a renowned voice in the industry, forecasts vegetable oil import at 12.3 mt in 2014-15, compared to 11.8 mt the previous year. The seed price in the benchmark Alwar (Rajasthan) market moved up 10 per cent to Rs 4,357 a quintal on December 31 as compared to Rs 3,919 a qtl on December 1.