Oil traders seek protection from high seed prices

Faced with crushing margins turning negative once again due to a spurt in oilseed prices, traders have urged the government to curb excessive speculation in raw materials in futures exchanges. Edible oil producers have cautiously passed on a part of the seed price rise to oil consumers amid fear of a demand slump.

The rapeseed/mustard seed price for near-month delivery on the National Commodity & Derivatives Exchange has gone up 19 per cent in the last two months, to trade currently at Rs 3,921 a quintal. Similarly, the commodity in the Jaipur spot market jumped to Rs 3,870 a quintal on March 24, as compared to Rs 3,240 a quintal on February 1. Mustard oil prices during the period have surged 14 per cent to quote at Rs 82.5 a kg on March 24, as compared to Rs 71.3 a kg on February 1. “During the last two months, speculative activities have gone up in RM seed, with trade volume surging to 183,360 tonnes on March 24 as compared to 91,420 tonnes in the beginning of February,” said Sushil Goenka, president, Solvent Extractors’ Association.