Mustard prices rise 15%; traders wonder why

MUMBAI: Like pulses, edible oils too are on fire, singing the common man’s wallet after two failed monsoons. But in the case of mustard a rather peculiar situation has emerged. Edible oils trade body Solvent Extractors’ Association ( SEA) claims that the 15% rise in spot and 16.7% rise in futures price over the past month is “unjustified”, given that this year’s crop is estimated at the upper end of a 50-60 lakh tonne range. Even some top physical market traders feel the same.

But, those who trade the futures market are not buying either’s claim and believe that the crop might be below 50 lakh tonnes in 2015-16. “SEA stands by its figure of 59.2 lakh tonnes, which is higher than last year’s 50.8 lakh tonnes, and feels the rise (in price) to be unjustified,” said BV Mehta, executive president, SEA. Atul Chaturvedi, CEO (agri business), Adani Group, says: “The rise has been steeper than expected. However, price trends on the futures market signal otherwise. The active month mustard contract on NCDEX has risen by 16.7% to Rs 4,576 a quintal, which is a wholesale rate. The spot price polled by NCDEX rose 15% to Rs 4,630, a premium to the near month futures rate.