Nafed expects 2 lakh tonne mustard sale

The National Agricultural Cooperative Marketing Federation (Nafed) expects to sell around 1.5-2 lakh tonne mustard each month in the upcoming festival season,said a senior official. This,however,is a small part of the 20.9 lakh tonne stock the federation holds.

The mustard sale has picked up in the last one month as Nafed is the only one in the market with such a big stock.

Nafed had earlier rejected numerous weekly/daily tender bids due to lack of good price. The federation's managing director Alok Ranjan, had earlier said, "We have bought at Rs 1,700 per 100 kg and there is no need for distress sale at lower price."

Nafed's mustard sale till date is around 46,000 tonne at a price between Rs 1,685-1,720 per 100 kg.

Estimates peg the total sale by Nafed, till the next mustard crop arrive, at around 8-9 lakh tonne thereby leaving the federation with a huge carry-over stock, the official added.

Further, Nafed's mustard procurement this year allowed good remuneration to the farmers and did not allow prices to crash despite good crop. This may encourage farmers to sow mustard in the next season.

Following this, the next mustard crop, to be sown in November-December and harvested in March-April, is likely to be like the crop earlier this year.

Nafed may then again be asked to procure mustard, in the government's bid to keep prices firm. The initiative, however, will just add to Nafed's problems.Keeping this in mind, the federation is considering re-launch its mustard oil brand. The federation is preparing a proposal for the same.The proposal will soon be put forth before the agriculture ministry for consideration.

Market players expect demand for mustard to come in despite huge import of other edible oils. This is largely due to a degree of non-exchangeability element with respect to mustard's pungency and colour.While traditionally the supply is lower in August-September period, this is not the case this year.

This year supply may outpace demand and price gains remain lower, analysts said.

As per official estimates, the country's total mustard output in 2004-05 (July-June period) is around a record 7.64 million tonne, up 23 per cent from a year earlier. Industry estimates put it at 6.4 million tonne.