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Low mustard buying may impact edible oils

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Ajay Modi New Delhi
Mustard procurement by the National Agricultural Cooperative Marketing Federation (Nafed) is likely to fall this year, which may impact edible oil prices in the coming months. The likely drop in mustard procurement follows the low procurement of wheat by the Food Corporation of India last year.
 
In the first 10 days of its procurement operation, the federation procured only 3,000 tonne of mustard, as market prices have firmed up on apprehensions of a decline in production.
 
"The open market rates are on the higher side, ranging from Rs 1,650 to 1,750 a quintal as against the minimum support price of Rs 1,715 a quintal. If this continues, mustard buying will be impacted," said Alok Ranjan, managing director of Nafed.
 
Farmers are also reluctant to sell their crop to the government agency, as there are chances of payments getting delayed. Therefore, they settle for private traders, who pay cash, even if it means a lower price. Moreover, the federation is buying only those quantities where the moisture content is up to 8 per cent. However, due to the recent rains, the moisture content has gone up.
 
According to the second advance estimates released by the government in February, rapeseed and mustard production this year is estimated at 75.6 lakh tonne against 81.3 lakh tonne last year.
 
Farmers in Rajasthan, Madhya Pradesh and Uttar Pradesh have shifted from oilseeds to wheat and chana due to bullishness in these commodities. According to estimates by the Central Organisation for Oil Industry and Trade last week, rapeseed and mustard production this year will be 62.20 lakh tonne.
 
The industry is also anticipating damage to crop on account of untimely rains and this has firmed up market prices. Prices of oilseeds and edible oils are likely to witness an uptrend in the current year.

 
 

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First Published: Mar 21 2007 | 12:00 AM IST

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