Mustard oil prices fall on hopes of good harvest

Since December 1, retail price of a kilogram of mustard oil has fallen by Rs 9 to Rs 5

Mustard oil prices, which had been on the upswing in the last few months, has shown a steady declining trend since December. The trend is likely to continue in the coming weeks too on hopes of a good harvest.

Though the area covered under mustard is, so far, less than 2015, industry players feel that production would be good as the standing crop is in a somewhat better condition. This should come as good news for the government, which has, in the last few months, grappled with sudden spike in prices of onion and then pulses.

Data from the department of consumer affairs shows that since December 1, retail price of a kilogram of packaged mustard oil has fallen by Rs 9 to Rs 5. (see chart) 

The 2015-16 mustard crop as per industry estimates is expected to be 6.14 million tonnes, up from 4.78 million tonnes last year, though the area covered is less. According to data from the department of agriculture, till last week, 6.27 million hectares, around 200,000 hectares less than last year was covered. The area covered was less in Rajasthan, Madhya Pradesh and Uttar Pradesh, but it was higher in Haryana.

Vivek Puri, Managing Director, Puri Oil Mills says usually there is a large fluctuation in mustard’s prices during January. “In the last few days, there has been a steady decline in prices of mustard oil and the weakness will continue in the coming days too as the new mustard crop may come in the market after the second week of February,” Puri said. Mustard oil prices were much higher in the past few months and have had an impact on consumption, which resulted in consumers shifting to cheap edible oils, he added.

Industry players said that flowering in mustard crop this year is 10-15% higher than last year and if the chilly winters return, the production would be better than 2015.

 “However, a final picture would emerge around first week of February,” another industry official said.

Rajasthan, Madhya Pradesh, Uttar Pradesh, Punjab and Haryana are the few main mustard producing states in the country. Rajasthan alone contributes 50% production of mustard crop. 

The country's main oilseed crops soybeans, peanuts and mustard contributes to the 85% of total domestic oilseed production. 

Retail Price of Mustard Oil in Rs/kg
City	1-Dec	15-Dec	30-Dec	11-Jan	change
Delhi	145	142	136	136	-9
Kolkata	120	120	118	112	-8
Chennai	137	137	137	137	0
Mumbai	106	106	104	104	-2
Lucknow	115	115	115	110	-5
Modal Price	100	100	100	100	0

Source: Department of Consumer Affairs