On 24 Jan 2016, we expressed
our views on likely scenario of Indian Rapeseed Mustard production and prices
in the light of weather disturbance and sown area progress under the article with the name “Recent
Weather Fluctuations can trim India’s Rapeseed-Mustard Production and spark the
prices during 2016”. The link of the article was given below http://prasoonmathur.blogspot.in/2016/01/recent-weather-fluctuations-can-trim.html)
Since then, there is marked increment in the reports of
sown area under this crop. Thus we provide below the updated information on the
same and consequently we also revise our production estimates. The likely price
scenario is also modified little bit accordingly.
Latest Sowing Progress of
Oilseeds in India
The sown area under Rapeseed-Mustard has increased to 64.51
lakh ha as on 27th Jan 2016 as against the 65.17 lakh ha area which was
sown during year 2014-15.
Thus
the sown area is now just 1% below from the last year’s figure on All India
basis. However, the
sown area is lagging behind by 3.64% in Rajasthan which is the leading
state in terms of Area and Production of Rapeseed-Mustard in India.
The Table given below has been extracted from SEA of India
website.
Pest & Diseases Scenario:
Due to changes in Temperature and other weather related
conditions, the advisories have been issued to state Governments and CIPMCs for
continuous monitoring of Yellow Rust diseases on Wheat crop in wheat growing
areas of Haryana, Punjab, Jammu & Kashmir, Himachal Pradesh, Rajasthan and
Uttar Pradesh along with the monitoring of Aphids
and White rust on Mustard growing areas on mustard crop.
·
Incidence of white rust in mustard crop has been reported
in trace to low intensity
in few villages of Sriganganagar district of Rajasthan; Anand, Kheda, Baroda,
Ahemadabad, Mehsana districts of Gujarat and south district of Sikkim.
Source: Crop Weather Watch
Group, MoA, India, dated 25 Jan 2016.
Production Assessment:
Thus based upon the above mentioned facts and figures, we
provide below the revised production estimates for the Rapeseed-Mustard crop in
India for the year 2016.
These estimates can further be revised
depending upon the coming weather and crop progress reports.
Thus, due to increment in the sown area as compared to the
previous report dated 24 Jan 2016, we revise upward the Rapeseed-Mustard production
estimate to 54 lakh tons for year 2016. However, this production figure is down by
around 6% from the previous year figure of 57.4 lakh tons of the Oilseeds
Industry estimates (Please note that the
Government estimates may differ).
Long Term Price
Outlook of Rapeseed-Mustard for the Year 2016
Currently Prices of Rapeseed-Mustard (RMseed) in the Indian
Commodities Market are hovering around Rs. 3900/quintals.
We have a BULLISH OUTLOOK for
RMSEED for the Year 2016.
However, since some upward revision in the production estimates
is made, the downside risk in the price levels may be seen in the range of 3550-3650
during Feb/March period which is the main arrival period.
The ideal strategy would be to ENTER the market at RIGHT TIME.
Judging the right price of entry seems
difficult.
Ideal Buying Period/Time in the
Market:
We would prefer to start buying from February First week. Then
gradually make averages on weekly basis till March first week or whenever price
decline in the range of 3, 6 and 8 % is seen from the first buying level of Feb
first week.
The long term upward Target seems near Rs. 5300/qtl during
Oct 16 to December 16 period.
(Substantial
reserve capital must be kept to meet out the MTM in the volatile market and
avoid over leveraging)
