Mustard: Mild prospects

COMMODITY SPIKES

Low output estimates for mustard seed this year failed to boost market sentiments with the near month contract on NCDEX is hovering around Rs 495 per 20 kg.

The forecasted shortage, however, has had a bearing on far month contracts which are quoted 10 per cent higher than the near month contract. Thus, the May 2008 contract is moving in a narrow range of Rs 551-553 per 20 kg.

Unfavourable climate has continued to hamper output this year as well with rabi season production estimated at 7.07 million tonnes, down 5 per cent from last year's final estimate of 7.44 million tonnes, according to the second advance estimates.

The open market price of mustard is ruling at Rs 2,300-2,400 a quintal, much above the minimum support price of Rs 1,800 a quintal.

The decline is mainly due to fall in mustard acreage by about 686,000 hectares and adverse impact on the crop due to cold weather in Rajasthan and Haryana.