Mustard prices up on higher offtake, bullish global trend

Mustard prices are ruling higher than the minimum support price (MSP) fixed by the Centre on higher demand and a bullish trend in edible oil prices. Prices of the oilseed have gained despite projections of a record harvest, with the harvest season just about starting.

Mustard prices are currently ruling ₹1,000 a quintal higher or about a fourth over the same period last year. Currently, market prices are ruling higher by over a tenth above the MSP of ₹ 4,650 per quintal across various markets in Rajasthan, the largest producer of the winter or rabi oilseed. In markets such as Alwar, Baran and Tonk in Rajasthan, where arrivals exceeded over 1,000 tonnes on Monday, modal prices or the rate at which most trades took place, ranged between ₹ 5,000 and ₹ 5,300 per quintal, according to Agmarknet data.

Arrivals have begun in other growing States such as Madhya Pradesh and Gujarat and the trade sources expect some moderation in the price trend when the arrivals peak next month.

Mustard production, according to the second advance estimates of the Ministry of Agriculture and Farmers Welfare, is seen at 10.43 million tonnes against last year’s 9.12 million tonnes, an increase of 14 per cent.

The trade estimates the crop between 8.5 and 9 million tonnes, higher than the last year’s 7.5 million tonnes.

Bumber harvest

“The bumper harvest this year is aided by increase in acreage and higher yields,” said B V Mehta, Executive Director, Solvent Extractors Association of India (SEA). The availability of water due to good rains coupled with favourable weather conditions is seen helping the mustard crop this year, Mehta said.

SEA, which expects the crop at around 8.5-9 million tonnes this year, will release the results of its crop survey soon.

Mustard acreage in 2020-21 rabi season was higher by about five lakh hectares at nearly 74 lakh hectares, with almost all major producing states reporting an increase in area.

Vivek Puri, Promoter of P Mark Mustard Oil brand, said “The crop is good this year both in quantity and quality terms. This year, we expect the crop to be higher between 8.5-9 million tonnes. Prices are ruling higher by about ₹ 1,000 per quintal. The higher mustard prices are also due to the higher soya and palm prices.”

“We are worried about the higher prices despite the fresh arrivals. The higher prices could harm the mustard oil segment in the long run as people will find cheaper options,” Puri said.

Mustard oil prices are ruling higher at around ₹ 150 per litre, about 10 per cent higher than in the same period last year. “Despite a bad crop last year, prices were lower. Now the crop is good, but prices are higher than last year, which is a worrying trend,” Puri said.

Last year, rains during March affected the quality and size of the crop. Also, consumption of mustard oil went up during 2020 due to the Covid lockdown, resulting in higher crushing. As a result, the carry-forward stocks were lower this year, resulting in a higher price trend, Mehta said.

Mustard prices, which had touched a high of ₹ 6,000 per quintal during February, have moderated to around ₹ 5,300-5,500 levels now and will rule above MSP levels going forward, he said. “It is going to be a good season for both mustard farmers and the industry,” Mehta added.

“Production is good this year and the arrivals have just begun as the harvest is going on,” said Charan Singh, a farmer from Rathiwas village in Haryana. Prices are ruling between ₹ 5,200 and ₹ 5,500, depending on the quality. The Haryana government has declared that it will procure mustard at MSP, but is yet to announce the purchase date, he said.

“We expect the production to rise to around 10 million tonnes and the growth in output this year is mainly due to expansion in area. The Government should look at leveraging technology to boost the mustard yields which hovers around 1,200 kg per hectare,” said Bhagirath Choudhary, Founder Director, South Asia Biotech Centre.

According to SEA’s Mehta, India had the lowest yield per hectare, among the mustard producing countries. As against the world average of 2144 kg per hectare, the Indian mustard yields stood at 1161 kg per ha during 2013-16. Rapeseed-Mustard accounts for about a third of the edible oils produced in the country.

According to SEA data, sunflower prices are up over 50 per cent compared with last year, while soyabean rates are up nearly 45 per cent. Only groundnut prices have not increased to corresponding levels of other oilseeds.

As regards cooking oils, sunflower oil prices are higher by 136 per cent this year against last year's prices, groundnut oil by 23 per cent, rapeseed/mustard oil by 53.36 per cent, washed cottonseed oil by 62 per cent and imported palm group of oils and degummed soyabean oil between 65 per cent and 75 per cent.

Globally, edible oil prices are up on lower production of palm oil, Brazil's problem in shipping soyabean and Ukraine sunflower production being lower by five million tonnes.

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