Big rape, mustard seed harvest poses price headache

India is expected to harvest a record rape and mustard crop this year, thanks to late rains in the kharif season amd showers during November.

More land was also brought under these crops by farmers following the increased 'minimum support price' (MSP) promised by governments.

Solvent Extractors' Association of India (SEA) executive director B V Mehta said the increase in MSP to Rs 1700 per quintal, for rape and mustard encouraged farmers to expand the area under cultivation .

"Rape and mustard harvest is expected to reach 70-75 lakh tonnes from last years' 65 lakh tonne, provided the weather is favourable", said Mehta.

The bumper harvest may hit edible oil prices and hurt farmers. Futures quotes for rape and mustard for March-April was around Rs 1550 per quintal.

Intervention was urgently needed to ensure farmers got remunerative prices for their harvest, said Mehta.

"SEA has sought the government's help in this regard", he claimed.

The Union government has directed apex cooperative marketing body, National Agricultural Cooperative Marketing Federation of India ltd. (NAFED), to scale up its operations in the harvest season.

Mehta said NAFED could procure the crop at MSP of Rs 1700 per quintal.

Alternatively, NAFED could intervene to hold the price of edible oil at around Rs 400 per 10 kg of rape and mustard oil, which would give farmers a good price for the oilseed.

"SEA has informed NAFED of the possible problem ahead and expect it to move fast ", added Mehta.

According to him, NAFED could both procure rape and mustard at MSP and hold the edible oil price line through market operations.

"Increase in import duty on palm oil could be considered to encourage farmers to grow more oilseed, he added.