Rapeseed & Mustard

Last Updated: 28 July 2014 03:13 PM

Mustard and rapeseed (canola) is the third largest vegetable oil traded in the world, next to soyabean and palm oil. A genetically modified variety of rapeseed (Brassica sps.) that was developed by Canadian plant breeders specifically for its nutritional qualities and its low level of saturated fat is known as Canola, which is a short form of “Canadian oil”.

Nevertheless, Brassica species are cultivated since historic times, particularly in Asian countries. According to ancient Indian literature, cultivation of Brassica rapa was practiced since 1500 BC and seed of Brassica juncea was reported to have found in archaeological sites. On the other hand, the Chinese word for rapeseed was first recorded 2500 years ago, and the oldest archaeological discoveries reported to be dated back to 5000 BC.

Rapeseed oil reported to be used as a marine and industrial lubricant during World War II and consequently, the market for rapeseed oil plummeted in the post war period. Production of rapeseed has been rising rather steeply during the past two decades and has outpaced the production of other oilseeds including peanut, cottonseed and sunflower.

Economic Importance

Seed: Rapeseed and mustard is grown for its oil rich seeds. Apart from extracting oil, seeds are also used directly in the preparation of almost all Indian curries particularly in a process called “tadka”

Oil: Well-developed rapeseed seed contains 40 to 44% of edible oil.

Meal: Seed extract after recovering oil is used as a feed.

Recovery on average

Oil to Seeds– 33%

Cake to Seeds– 67%

Climate and Cultivation

Rapeseed and mustard can be cultivated in both tropical as well as temperate climates. Its growth is most vigorous in temperatures between 10°C and 30°C with an optimum temperature of around 20°C. Seed oil formation is optimum at a temperature of 10°C to 15°C. The crop is very sensitive to high temperatures as well as for frost at the time of flowering. Crop growth is healthy at a rainfall of 350-550 mm.

Rapeseed is normally cultivated as a rabi crop in India as it requires relatively cooler temperatures for seed setting and oil formation. Sowing normally starts in the month of November and the crop season spreads up to April.

Calendar of operations in India

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Rajasthan

Uttar Pradesh

Madhya Pradesh

Haryana

Gujarat

Punjab

	Sowing
	Harvesting

World Scenario

World output of rapeseed and mustard has been increasing persistently and rather steeply during the past 15 years. The output has doubled from about 36 million tonnes in 2001-02 to 70 million tonnes in 2013-14. Production from European Union and Canada has risen steadily and reached to nearly 30% and 26% respectively of total world production. On the other hand, output from China has remained largely stable at around 12-13 million tonnes and consequently its share has declined to about 20% from about 31% a decade ago.

Table 1: Top five rapeseed producers, consumers and traders in the world

Producers	%	Consumers	%	Exporters	%	Consumers	%
EU	30	EU	36	Canada	57	China	27
Canada	22	China	27	Australia	30	EU	26
China	22	Canada	11	Ukraine	10	Japan	20
India	11	India	11	US	1	Mexico	11
Australia	6	Japan	4	EU	1	UAE	5

Source: USDA

The steep rise in production from Canada was primarily on account of significant expansion in area, which could have apparently been driven by a sharp rise in exports from Canada. While the production and consumption doubled during the past decade, trade has gone up by three times. During this period, exports from Canada rose by nearly four times.

Table 2: Trends in world production and consumption (million tonnes)

	Production	Exports	Consumption	Stocks
2009-10	61.1	10.8	59.4	8.9
2010-11	60.6	10.9	61.5	7.2
2011-12	61.5	12.9	63.8	5.2
2012-13	63.0	12.5	65.3	3.2
2013-14	70.1	13.6	67.4	5.6

Source: USDA

Similar to production, world consumption pattern of rapeseed and mustard also doubled during the past 15 years primarily driven by the European Union, China and Canada. The European Union registered growth followed by Canada and China. Consequently, imports by China and the EU rose the steepest pushing them to top two positions replacing Japan and Mexico.

Domestic Scenario

India is the fourth largest producer of rapeseed & mustard. Production trends over the past two decades indicated that there was a significant shift in production levels from about 5-6 million tonnes until 2002-03 to around 7-8 million tonnes during the past one decade. The jump in production was primarily on account of sharp rise in yields. In addition, there was a significant expansion in area under rapeseed during the same period.

Table 3: Trends in domestic production and consumption (000’tons)

	Production	Consumption	Stocks
2008-09	6700	6155	1007
2009-10	6400	6227	1180
2010-11	7100	7350	929
2011-12	6200	6825	304
2012-13	6800	6900	204
2013-14	7000	6975	229

Source: USDA

State-wise production

Rajasthan occupies the first place both in terms of cultivated area and production accounting for over 45% followed by Madhya Pradesh with 13%. Haryana and Uttar Pradesh occupy the third place contributing for 11% of total production each. Thus, the top four states produce about 80% of total rapeseed & mustard production in the country.

Major Markets

Spot markets: Sriganganagar, Jaipur, Kota, Alwar, CharkhidadriandDelhi.

Futures markets: Mustard is traded in futures markets mostly in seed form. Major futures exchanges include Hapur, Hissar, Delhi, ACE, ICEX and NCDEX.

External Trade

India doesn’t export or import rapeseed and mustard seed.

Major export destinations: NA

Major import sources: NA

Factors Influencing Prices

Crop condition and output expectations: Extent of area sown under the crop, condition of the crop and output expectation.
Monitoring of rainfall and weather conditions that could affect the crop output.
Domestic demand expectation: Any changes in demand both domestic as well as international markets.
Stocks available in the market.
External demand and supply: Demand supply situation in major import sources.
Trade policies: Any change in government policy relating to change in tariffs etc.,

Rapeseed and Mustard Oil

Table 4: Trends in demand and supply of rapeseed oil in the world (‘000tons)

	Production	Exports	Consumption	Closing Stocks
2009-10	22556	2728	22614	1288
2010-11	23516	3423	23501	1191
2011-12	24221	3970	23777	1674
2012-13	24874	3929	23653	2827
2013-14	25629	4182	24595	3448

Source: USDA

Table 5: Trends in demand and supply of rapeseed oil in India (‘000tons)

	Production	Imports	Consumption	Closing stocks
2009-10	2080	18	2096	2
2010-11	2500	5	2318	185
2011-12	2310	98	2433	158
2012-13	2310	8	2425	49
2013-14	2330	50	2400	27

Source: USDA

Major Markets

Spot markets:

Sriganganagar, Jaipur, Kota, Alwar, AgraandKanpur.

Futures trading: NA

External Trade

Major export destinations: NA

Major import sources: Canada

Meal

Table 6: Trends in demand and supply of rapeseed meal in the world (‘000tons)

	Production	Exports	Consumption	Closing Stocks
2009-10	33457	3607	33298	431
2010-11	34727	5151	34481	498
2011-12	35936	5370	35545	609
2012-13	36982	5412	37022	285
2013-14	38028	5582	37406	523

Source: USDA

Table 7: Trends in demand and supply of rapeseed meal in India (‘000tons)

	Production	Exports	Consumption	Closing Stocks
2009-10	3287	786	2500	22
2010-11	3945	1311	2630	26
2011-12	3645	1000	2650	21
2012-13	3645	901	2735	30
2013-14	3670	875	2795	30

Source: USDA

Major Markets

Spot markets:

Sriganganagar, Jaipur, Kota, Alwar, AgraandKanpur.

Futures trading: NA

External Trade

Major export destinations:

Bangladesh, China, Italy, Japan, Malaysia and Thailand

Major import sources: NA