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Indian rapeseed farmers hold back stocks

Indian farmers are holding back stocks of rapeseed and mustard, awaiting a government decision on a rise in edible oil customs duty which they feel would bolster prices, traders said on Monday.

They said arrivals of rapeseed and mustard in the markets had fallen due to a move in prices below the levels fixed by the government.

Rapeseed prices have dropped to around Rs 900 ($ 20.25) to Rs 1,000 a quintal (100 kg) against the support price of Rs 1,100 fixed by the governments in Gujarat and Rajasthan.

The prices were around Rs 1,200 a quintal during the same period last year.

"The only thing that can stop the sinking market is an announcement of increase in import duty," Savantilal Morakiya, a leading trader said in Deesa, one of the largest rapeseed and mustard seed markets in Gujarat.

Gujarat accounts for 15 per cent of the country's rapeseed output. India's vegetable oil trade has been hit due to huge inflow cheap imported oils. The country imported 1.87 million tonne of edible oil in the first half of 1999-2000 (Nov-Oct), up 31 per cent from the previous year.

Minister for Consumer Affairs and Public Distribution Shanta Kumar said last week the government was reviewing the entire edible oil duty structure.

In December, India had raised import duty on refined edible oils to 27.5 per cent from 16.5 per cent but the industry said the hike was not enough to stem imports.

Daily arrivals in Rajasthan, the biggest rapeseed producer in India, have dropped to around 100,000 bags compared with 250,000 bags in the same period last year, traders said. One bag is equal to 85 kg.

"We are getting around 2,000 bags everyday against 3,500 that usually come in this season," a trader in Deesa said.

The country gets most of its rapeseed output from the summer or rabi crop, which is sown in winter and harvested in March.

India produced 4.9 million tonne of rapeseed in 1998-99 and industry officials have estimated 5.1 million tonne of output in 1999-2000.

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