Nafed's daily mustard tenders hit weekly sales

The encouraging response to National Agriculture Cooperative Marketing Federation's (Nafed) daily tenders for sale of mustard seed has led to decline in interest in its weekly tenders, a top agency official said on Wednesday. The agency could not receive any single bid for its weekly tenders today, he said.

"It seems traders are wary of participating in weekly tenders as they have to pay earnest money and also the process is more complex then daily tenders. Moreover, with mustard seed prices softening in the open markets, response to weekly tenders has also gone down," he said.

Last week, Nafed rejected all bids for the weekly tenders for sale of mustard seed as they were below the price offered by Nafed to sell its stocks.

The Federation had received bids for sale of around 1,400 tonne of mustard seed from seven traders.

"Our interaction with the traders gave the impression that they were more comfortable buying mustard seed from Nafed through daily tenders," the official said.

However, since Friday, the federation has sold around 11,000 tonne of mustard seed through daily tenders at a price of Rs 1,655-1,660 per 100 kg.Till date, Nafed has managed to sell around 87,000 tonne of mustard seed through its daily and weekly tenders.

Since August, when the sales started, Nafed has rejected six consecutive weekly bids, as the price quoted was lower than its procurement price of mustard seed.

On August 31, the federation for the first time accepted bids for its weekly tenders and sold around 1,685 tonne of mustard seed.Nafed is inviting bids for sale of around 2.09 million tonne of mustard seed procured by it at a minimum support price of Rs 1,700 per 100 kg around April-June.

The mustard seed is being sold at 'as is where is' basis.

The procurement was done under the price support scheme of the central government.

The federation has spent around Rs 3,500 crore in two installments for procurement of mustard seed after a bumper harvest.

The sale of mustard seed procured by Nafed will be done in two ways. First the agency has invited bids for its weekly tenders that will be opened every Wednesday. A minimum purchase requirement of 200 tonne has been fixed for any bidder for weekly tenders.

Nafed is also seeking daily quotations from traders for sale of mustard seed. These quotations can be sent either through e-mail or fax to the respective regional offices of the agency and are free of cost.

The respective regional branches of Nafed have been allowed to fix their minimum purchase requirement.

Official estimates said India produced around 7.64 million tonne of mustard seed in 2004-05 (July-June), up 23 per cent from year-ago.