Mustard prices increase on acreage drop

The prices of mustard in the spot and futures market have jumped by about 7-8 per cent over the last 10 days owing to declining acreage of rapeseed-mustard in the current rabi season. Mustard oil has also seen a corresponding rise.

According to the ministry of agriculture, about 34.76 lakh hectare has been sown under rapeseed mustard, as on November 9, significantly lower than the 47.65 lakh hectare sown over the same period last year.

At the National Commodities and Derivatives Exchange (Ncdex), the rate of mustard seed for November delivery has moved from Rs 366 per 20 kg on November 8 to Rs 390, whereas December futures have edged from Rs 379 to Rs 401.

In Delhi, the spot mustard has jumped from Rs 1,625-1,850 per quintal to Rs 1,750-2,000 over the same period. As a consequence, prices of mustard oil have also increased from Rs 4,300 a quintal to Rs 4,500-4,700.

The National Agricultural Cooperative Marketing Federation (Nafed) is carrying mustard stock of 18 lakh tonne. "We would sell our mustard at the ruling market prices. At present, the rate of our mustard is about Rs 1,700 per quintal", said Alok Ranjan, managing director of Nafed.

"Mustard seed spot and futures are up owing to good demand from extractors and stockists. Reports of sluggish progress in rabi mustard sowing is also keeping buyers interested in mustard", said an analyst with Kotak CSL Research.

Last year, the country had a record mustard production at 78.87 lakh tonne against 76 lakh tonne in the year before. However, there may be a decline this year.

In Madhya Pradesh, the area sown under rapeseed and mustard, as on November 9 this year, was only 5.57 lakh hectare against 7.43 lakh hectare last year. In Uttar Pradesh, no sowing of rapeseed mustard was reported by November 9, while last year 8.10 lakh hectare had been sown around this time.

Farmers have shifted from oilseeds to crops such as wheat and chana keeping in view the bullishness in both these commodities. In MP, about 5.34 lakh hectare has been sown under wheat by November 9, whereas no area was covered under wheat by this time last year.

Again, the acreage of chana in the state has gone up from 13.4 lakh hectare to 15.26 lakh hectare as on November 9.