The government's move to raise the import duty on edible oil has had a positive impact on the prices of soyabean and mustard seed, which have started showing recovery.
In the Indore mandi, prices of oilseed have gone up by 2-3 per cent to touch Rs 3,870 a quintal for mustard seed and Rs 3,120 a quintal for soyabean since last Friday.
Traders and companies anticipate prices to go up further in anticipation of a lesser crop this year due to fall in planting of oilseed this kharif season.
"Since Friday, prices have increased Rs 50-100 a quintal for soyabean at Rs 2,700-3,120. We expect firmness in price to continue for the next month as carry-over crop is less and planting is also less," said Vikas Aggarwal of Srinath Mutitrade in Chawni mandi of Indore.
Angel Commodities said soya bean and mustard seed futures were expected to trade higher due to expectation of good de mand from mills for crushing with hike in import duty for edible oil.
"Prices have been trading on the lower side but will go up in the short-term owing to festive and industry demand," said Anuj Gupta, he ad of commodity research, Angel Commodities Broking.
Around 25-30 mills, which represents 30 per cent of the total mills which are into soyabean crushing in the country, are currently operating, said a company owner. The trade expects crushing to pick up in September-October when new crop arrivals in mandis increase. Early sown soyabean crop arrivals have already started in Maharashtra which will be followed by Madhya Pradesh, Gujarat and Rajasthan.
Ashok Chattar of Madura Trading Company in Jaipur said mustard prices which has been stable for the past one month due to steady demand and higher availability of imported oil had seen a price increase of Rs 25 a quintal since Friday.
"In tandem with soyabean, mustard seed price will also increase. We have to wait and see how much," he said. Import duty on Canola oil and sunflower oil should also be increased to ensure that farmers plant more of mustard this rabi season.
Source: The Economic Times