Mustard oil continues to trade low as arrival of mustard seeds in Madhya Pradesh mandis is picking up. With mandis in the State remaining closed today on account of Republic Day, mustard oil in private trading here ruled flat at Rs 708 for 10 kg. Mustard oil in other mandis of Madhya Pradesh, Rajasthan and Gujarat, on Wednesday, also witnessed bearish sentiment with its prices in Neemuch (Madhya Pradesh) being quoted at Rs 700, Rs 710 in Moorena (Madhya Pradesh)Rs 735 in Jaipur (Rajasthan), Rs 720 in Ganganagar (Rajasthan). Mustard oil in Gujarat ruled at Rs 700 for 10 kg.
Oil industry in Madhya Pradesh appears to be divided over pricing of mustard oil. While a section of oil traders presume a bearish sentiment as arrival of mustard seeds in the State mandis will pick up in coming days. At the same time, another section of traders foresee bullish future in the mustard oil with a distinct shortfall in production this year as compared with the previous year.
According to the recent estimate, production of mustard seeds in the country is expected to be around 55 lakh tonnes as against 70 lakh tonnes last year. However, according to a Morena-based mustard oil trader, Mr Mohan Lal Agrawal, given unfavourable weather conditions in the mustard growing regions of the country, including Madhya Pradesh, and possible damage to standing mustard crops on account of cold wave and snowfall, the production of mustard in the country may go below 50 lakh tonnes and in that eventuality, prices of mustard oil in all likelihood would go up on account of mismatch between demand and supply, he added.
The decline in mustard production in the country has also been attributed to lack of sowing interest among farmers given the poor prices that the mustard seeds are commanding in the market. Though the government has increased the minimum support price for mustard seeds by Rs 800 a quintal, it has hardly encouraged farmers to go for sowing of mustard on a large-scale, said another trader.