Kolkata: This year India registered record production for rapeseed to the tune of nearly 85 lakh tonne, which, in turn, has put pressure on prices of mustard seed and the farmers are realising Rs 3,500 to Rs 3,600 a quintal (basis 42 per cent oil), against the Minimum Support Price of Rs 4,200 a quintal. Exports of mustard oil in bulk, may not be in the large quantity but it will definitely impact the market sentiment and support the price levels. At least that's what the Solvent Extractors Association of India (SEA) feels.
The oil trade body has taken up the matter with the ministries of commerce and consumer affairs, food & public distribution and agriculture & farmer's welfare, urging them to allow exports of rapeseed oil/mustard oil in bulk quantity to support the price of mustard seed and thereby farmers. The SEA has also submitted a memorandum to Directorate General of Foreign Trade.
Interestingly, although in March last year, the Cabinet Committee on Economic Affairs had thrown open export of all varieties of edible oils, it had kept mustard oil out of that list. Mustard oil continued to be exported in consumer packs of up to 5 kgs, with a minimum export price (MEP) of $900 per tonne.
As per the SEA, the export of oilmeals during May 2019 is provisionally reported at 58,549 tonne compared to 2,63,644 tonne in May 2018, down by 78 per cent. The overall export of oilmeals during April-May 2019, reported at 3,13,134 tonne compared to 4,87,995 tonne in April-May 2018, down by 36 per cent.
When it comes to mustard oil, for the year April 2017 to March 2018, India exported 3,266 tonne of mustard oil, while during April 2018-March 2019, the export was about 3,559 tonne. Unlike other vegetable oils, mustard oils have a larger market in the US, the UAE, the UK, Nepal, Canada and Bhutan, among others.
Going back to prices of mustard seeds, prices fell 0.18 per cent to Rs 3,935 per quintal in futures trade by the end of the last week, with speculators trimming positions, prompted by subdued cues from the physical market. On the National Commodity and Derivatives Exchange, mustard seed for July delivery contracts declined by Rs 7, or 0.18 per cent, to Rs 3,935 per quintal with an open interest of 93,740 lots. Similarly, mustard seed for August delivery contracts was also trading down by Rs 8, or 0.2 per cent, at Rs 3,956 per quintal with an open interest of 13,120 lots. Analysts said that the persistent weakness in prices can be attributed to participants cutting down positions.
