Commodity Revenue Management: India's rapeseed/mustard oil sector

By N.C. Pahariya, Chandan Mukherjee on July 11, 2007
The fourth in a set of seven case studies examining national responses to the commodity price problem, this study looks at how the Indian government and local producers have addressed volatility in the rapeseed/mustard oil sector.

Commodity price volatility is not a new problem in India, however it has grown in the wake of recent liberalization programs and the opening of the domestic sector to the global marketplace. The government and the private sector have tried to stabilize rapeseed/mustard oil prices through the variety of means, including compensatory financing and price hedging on futures markets but few, if any, of these mechanisms have been fully successful.

The paper begins by introducing the rapeseed/mustard oil sector, highlighting its importance to the Indian economy. It then discusses the national revenue management strategies of the rapeseed/mustard oil sector and concludes with recommendations for improving and stabilizing the earnings of the government and the farm sector from rapeseed/mustard oil.

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IISD, 2007