Low mustard output to hit Nafed buying

The National Agricultural Cooperative Marketing Federation (Nafed), the government agency for price support scheme (PSS) in oilseeds, expects negligible procurement of mustard in the rabi marketing season next year.

"Though the minimum support price (MSP) of mustard has been raised from Rs 1,715 to Rs 1,800 a quintal, our procurement under PSS will be too small since the new crop is expected to open at a price much higher than the MSP," said Alok Ranjan, managing director, Nafed.

At present, mustard prices are in the range of Rs 2,200-2,300 a quintal.

Mustard sowing in the ongoing rabi season is lagging behind at 5.72 million hectares (as on December 14) against last year's 6.42 million hectares.

The mustard production in 2006-07 was estimated at 7.10 million tonnes, down 12.66 per cent from 8.13 million tonnes in 2005-06. The production is likely to drop further this year.

The low crop had led to a fall in mustard procurement by Nafed. The federation procured 2.1 million tonnes mustard in the 2005-06 rabi season at an MSP of Rs 1,715 a quintal and 2.09 million tonnes in 2004-05 at an MSP of Rs 1,700. However, in 2006-07, the federation was able to procure only 21,000 tonnes at a price of Rs 1,715.

The agency is now focussing on packaged mustard oil market. "We have been able to establish mustard oil under Nafed brand in West Bengal, Orissa, Bihar, Jharkhand and Uttar Pradesh. So, even if we are unable to procure under PSS, we will continue with our packaged oil," added Ranjan.

Nafed currently has a stock of 350,000 tonnes. It is selling 30,000 tonnes every month as seed while processing another 40,000 tonnes into oil. The federation has been able to sell 4,925 tonnes of mustard oil worth Rs 26 crore so far in the current financial year.