Nafed to halt mustard sale as acreage shrinks

The National Agricultural Cooperative Marketing Federation (Nafed) plans to stop sale of mustard once the stock with the federation reaches 10 lakh tonne.

Currently, it has about 16 lakh tonne of mustard and wants to keep 10 lakh tonne as carryover stock since the area under mustard has declined.

"We would sell four lakh tonne as seed by January, while another two lakh tonne would be crushed by us for oil over the next few months. Once the stock reaches 10 lakh tonnes, we would stop selling mustard," said additional managing director of Nafed, Kailash Jyani.

"We are also avoiding selling large quantities to a single buyer. At present, no one can buy more than 3,000 tonnes. The carryover stock would enable the federation to intervene in the market and check the price in case they rise to unusual levels next year," he added.

Nafed had procured about 21 lakh tonne mustard this year at Rs 4,000 crore and a minimum support price (MSP) of Rs 1,715 a quintal. In addition, it had a carryover stock of 15 lakh tonne from last year's procurement.

The entire stock from the previous year has been disposed. It is selling mustard at a rate of Rs 1700-1760 a quintal now. The price has moved up by more than Rs 200 per quintal over the last five months.

In 2005-06, the country had a record mustard production at 78.87 lakh tonne against 76 lakh tonne in 2004-05. However, there may be a decline in the 2006-07 season.

The area under rapeseed-mustard has declined from 69.52 lakh hectares to 63.68 lakh hectares as on December 8 and there may be a decline in the final yield.

The sowing pattern indicates that in states like MP and UP the farmers have shifted from oilseeds to crops such as wheat and chana keeping in view the bullishness in both these commodities.