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Agro-Products : Rapeseed Mustard Seed
Rapeseed/Mustard is a traditionally important oilseed. China, Canada and India are the major producers of this commodity. The other major producers are Germany, France, Australia, Pakistan and Poland. The World production has increased from 26.8 million tons in 1993-94 to 36.54 million tons in 2001-02; production and consumption of this oilseed grew at the rate of 4.65% and 5.03% respectively during the last decade. Annual export trade of rapeseed stands at around 3 million tons.
The commodity has been commercially exploited in the form of seeds, oil and meal. The hybrid form of rapeseed known as canola in overseas market is more popular internationally. Rapeseed, as 'canola' is actively traded at the Winnipeg Commodity Exchange (WCE) in Canada.
The Indian Scenario
Rapeseed has been a traditionally important oilseed crop in the country. Its production has been fluctuating in the range of 4.6-5 million tons over the last few years.
The average production in the country in the last decade has been around 5.3 - 5.4 million tons. About 1.5 lakh tons is retained for sowing and direct consumption as 'seed', leaving about 4.8-5.1 million tons for crushing and extracting oil. It is a major Rabi crop (sown during October-November and harvested during February - March). Rajasthan and Uttar Pradesh are the major rapeseed producing States in the country. Together, they produce about 50% of the crop. The production from Rajasthan is highly monsoon dependent. The other significant producers are Madhya Pradesh, Haryana, Gujarat, West Bengal, Assam, Bihar, Punjab and Jammu and Kashmir.
Rapeseed/Mustard is one of the major sources of oil and meal to India. It supplies over 1.5 million tons of oil and 3-3.2 million tons of meal. Hapur, Alwar, Bikaner and Jaipur are the active spot markets for mustard in the country. Peak arrival period for the commodity in these markets is March-May. Major portion of the commodity enters the regulated mandies and is purchased by oilseed crushers. Futures trading in Rapeseed is also prevalent in some of the Exchanges across the country. Rapeseed prices in the spot market at Hapur, which were at around Rs 12000-13000/ton in 2002, surged to Rs 17000-18000/ton during 2003 owing to sharp decline in production during the 2002-03 crop season. The prices were also seen touching Rs 21000-23000/ton mark during the year.
Being an important source of edible oil and feed meal to the country, rapeseed is undoubtedly the focus of Indian oilseed industry. Efforts are being made both by the Government of India and the industry associations to increase production of this vital source of edible oil and meal. Like any other major oilseed, price of rapeseed is also influenced by various supply-demand factors revolving around the global edible oil scenario. The seasonal nature of the production, its high susceptibility to natural fallacies, wide consumption of its derivatives (oil and meal), the nature of the existing supply and value chain, the present dependence on the other edible oils and oilseeds traded in the country and abroad throws tremendous opportunity for 'trade' in this commodity. The ups and downs in production, arrivals in the mandi, international prices of other oilseeds and oils, heavy presence of speculators and stockists and the presence of a large unorganised crushing sector cause daily price volatility in prices.
Futures trading would also provide a right tool for hedging the market-related risk for everyone in the value chain of the commodity- the producing farmers, processors, brokers, speculators, mustard oil and meal traders, feed manufacturers, etc. |
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