Chinese market brightens prospects for mustard

As market prices of mustard rule above minimum support price (MSP) levels, the planting of rapeseed-mustard is set for a healthy growth this rabi season.

Supported by China lifting the ban on Indian import of mustard meal, oilseed prices are firming up in the spot as well as futures markets.

Prices zoom

In the spot market, mustard seed prices hovered around ₹4,250-4,300 per quintal, higher by about ₹100 per quintal as against the MSP of ₹4,200, announced by the Centre last month.

Also, the spot prices are higher by about 7 per cent from what was seen last year. Mustard seed futures for the near month contract quoted at ₹4,080 on the NCDEX on Wednesday.

Lower rabi acreage

The Solvent Extractor Association of India (SEA) noted that as on November 15, rabi sowing indicated nearly 60 per cent completion at 46.85 lakh hectare, as against 49.50 lakh hectare for the corresponding period last year.

“The overall sowing acreage is slightly lower than last year and the same is the case of groundnut and sunflower and other oilseed crops. In the last fortnight, the temperature has fallen sharply in Northern India with the current price support, acreage will bounce back to near normal,” said Atul Chaturvedi, President, SEA in a letter to the association’s members on Wednesday.

Notably, the real benefit of mustard meal exports to China will be reflected in the coming months, as the shipments will take about 15 days to a month to begin.

The SEA has also reiterated its concerns on the RCEP agreement; with cheap Chinese imports being the biggest fear. Citing the example of the Comprehensive Economic Cooperation Agreement (MICECA) with Malaysia for MFN tariffs, Chaturvedi said that “Currently, under MICECA India has imposed highest import duty on CPO at 44 per cent and RPO 54 per cent effective from June 14, 2018”.

According to MICECA, the upper limit of duty on CPO and RPO must be revised downward to 40 per cent and 45 per cent respectively latest by December 31, 2018. Duty reduction would discourage oilseed farmers as prices may come under pressure.

“The Association has sensitized the Government on this issue and suggested to re-negotiate this treaty and in the meantime ensure that appropriate steps be taken to protect the domestic farmers and refiners,” he said.