Nafed to procure 2.09 mt mustard from next crop

National Agricultural Cooperative Marketing Federation of India (Nafed) will procure around 2.09 million tonne of mustard seed from the crop to be harvested from February, a Nafed official said today. Nafed will buy mustard at market intervention price to ensure better returns to farmers.

"Mustard production from Rajasthan and Haryana is expected to be quite high. We see mustard procurement by Nafed as much as last year if not more," Nafed Managing Director Alok Ranjan said.

The state-owned agency procured 2.09 million tonne of mustard at the minimum support price of Rs 1,710 per 100 kg from last rabi season, which ended in February.

Nafed had bought the 2.09 million tonne for Rs 4,000 crore under the Centre's market intervention scheme after open market prices fell to Rs 1,450-1,500 per 100 kg in April-June. The minimum support price was raised to Rs 1,715 for the current season.

Of this 2.09 million tonne, Nafed has already sold 2,60,000 tonne, while 1.83 million tonne is still at its warehouses, he said. "Yes. Warehouses are full. We wonder where to store mustard, once we procure from the next crop," Ranjan said. "However, we have started relocating the stock. We expect space crunch to ease to an extent in a couple of months."

Nafed has already transported some of the stocks staked in its Rajasthan warehouses to Uttar Pradesh, Punjab and Kolkata.

"The Central Warehousing Corp is assisting us to relocate the mustard seed in Rajasthan. We have already made some space available in Madhya Pradesh," he said. Sowing of mustard has been high and production for the new crop is likely to be higher than last year, Ranjan said.

Rajasthan, one of the main mustard-growing states in India, is likely to produce around 4-4.4 million tonne, pushing overall production to over 7.2 million tonne. Official estimates show that India produced around 7.64 million tonne of mustard seed in 2004-05 (July-June), up 23 per cent from a year ago.

The government agency recently floated global tenders to sell around 1.5 million tonne of mustard seed to foreign buyers. This quantity would be surplus after selling mustard oil under its brand name and undertaking local sale.

Since August, Nafed sold around 2,00,000 tonne of seeds to domestic buyers through tenders.When its domestic sale process failed to elicit good response, Nafed decided to produce around 1,50,000 tonne of mustard oil by processing another 4,00,000 tonne of seed.

Now Nafed has decided to sell the remaining stock overseas. However, a section of the edible oil industry feels that given the excess supplies of mustard seed in foreign markets due to bumper crop in Canada and Australia, Nafed would find it difficult to get a good price.

"I know fetching very remunerative price may be difficult, but we are not going for distress sale," Ranjan said.