The Hindu Business Line : Inventory fall may prop up rapeseed futures

Mumbai, March 25 Rapeseed/Mustard seed (RM seed) futures in NCDEX are set to gain further as the warehouse inventory dipped steeply to 2,378 tonnes from 60,000 tonnes in the last two months. Moreover, the rabi output is estimated to be lower at 50.7 lakh tonnes against 60.2 lakh tonnes last year.

High cost of cultivation and unfavourable weather has forced many farmers to shift from RM seed to other crops. Revision of minimum support prices to Rs 1,800 per quintal from Rs 1,715 per quintal last year also failed to revive farmers’ interest. They preferred to grow wheat and chana, which enjoyed higher market price and lower cost of cultivation. Farmers ended the season sowing RM seed in 59.82 lakh hectares against 66.68 lakh hectares last year.

With the lower acreage, the Central Organisation for Oil Industry and Trade (COOIT) estimated a production 58 lakh tonnes. Trade sources watered down the output estimation to 55 lakh tonnes due to severe cold weather in January.

In the recently-concluded Oil Seed Conference at Agra, COOIT revised its mustard seed production projection to 50.7 lakh tonnes.

Over the last 4-5 years, the production and consumption have been in sync. Ending stock ranged between 5.2 per cent and 9.9 per cent of the total production.

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