Government Purchases Continue in Mustard, Near Term Price View Appears Moderately Upward

Procurement of Mustard continues with satisfactory pace in the country despite Covid -19 outbreak. Because of this the wholesale prices are maintaining firm trend mostly. Mustard procurement commenced at 165 centres across Haryana last month onwards and to overcome the corona virus outbreak during the procurement season, the state government not only has increased the number of purchase centers from last year’s 64, but also put limit against the number of farmers visiting these centers per day at 100 only. As on date total quantity procured by the Haryana Government has gone to 6.5 Lakh tones and more than 9000 farmers of the state has been able to sell their produce to the government till now.  

The Gujarat State Cooperative Marketing Federation Ltd (GUJCOMASOL) has bought gram and mustard seeds worth Rs 17 crore, since the procurement began on May 1. The procurement of mustard continues in Rajasthan despite ongoing strike in the state. Purchases are going on in the state of Rajasthan despite Mandi strikes. The state government had reported that 1.16 lakh tonnes of mustard and gram had been procured so far from 45,813 farmers in the state at the minimum support price till May 12 totalling Rs 541.52 crore. Out of this, nearly Rs 386.71 crore has been credited to 32,509 farmers in their bank accounts. Government officials reported that in order to ensure procurement related benefits to maximum number of farmers to get the benefit of purchase at the MSP, the capacity of centres has been increased by 10 per cent, and this has helped nearly 15,000 farmers of the state.   

There have been rains and hailstorms in major producing regions of UP/Rajasthan in recent months due to which possibility of lower crop output has risen. As lockdown continues, mandis remain nearly closed these days and harvesting has been delayed by few weeks. As a result arrivals on daily basis are quite lesser these days. Mandi prices are still below the MSP hence growers and stockists shall prefer waiting for better prices rather than selling at prevailing rates. This explains mustard markets stabilizing in recent weeks and price trend remaining hinged towards the upward direction mostly.  

RM seed also finds some support from palm oil as it bears a positive correlation with RM oil, and at present RM oil demand is improving ahead of the Ramazan season. Malaysian palm oil also trades with positive tone in present term. Therefore it continues lending support for the domestic mustard market as well. Buying interest is relatively better in soybean also, as seen during beginning of this year. All these factors are influential enough in keeping prices firm during balance part of May 2020. Since arrivals will improve after the lockdown, traders and stockists expect a reasonable fall during next month. But for the current month, it is unlikely that mandi prices will register any sharp fall from prevailing offers. As per analysts from broking firms June RM seed of NCDEX is most likely to trade between 4000-4300 for next couple of weeks. Based on given factors, price view for next few weeks appears moderately firm for the Rabi Oilseed.