India's rapeseed supplies in the local market have fallen about 60 percent in the last two weeks as the peak harvesting season ended, which is likely to raise prices by about 10 percent over the next two to three months, traders and analysts said Friday (May 8).

Supplies have fallen to about 200,000-250,000 bags a day, compared with about 500,000-600,000 bags during the peak season in March-April, according to traders.

In India, rapeseed is mainly grown as a winter crop, which is sown during October and harvested in March. Traders said that farmers prefer to sell wheat because the government is offering a lucrative price.

"Farmers are getting better remuneration for their wheat crop from the government immediately, but in case of rapeseed they are mostly selling it to traders and getting their due later," said D.P. Khandelia of Khandelia Oil and General Mills Pvt. Ltd.

The federal government increased the state-set purchase price of wheat to INR10,800 a tonne this year from INR10,000/tonne the previous year, which is encouraging farmers to sell more grain to the government.

Traders are offering a better price than government agencies for rapeseed, but they are delaying payments, which is prompting farmers to hold back their stocks for the time being.

In India, most farmers in the main growing regions like Rajasthan and Haryana grow both wheat and rapeseed as winter-sown crop.

India's state-run Food Corp. bought 20.65 million tonnes of wheat from April 1 to May 4, up 24 percent on year.

"As farmers are holding back their stocks, the supplies to the market have fallen," said Govindbhai Patel, managing partner of Dipak Enterprises and a leading expert on vegetable oils.

Falling supplies in local market may increase the prices by INR200-INR250 per 100 kilograms in the next two-three months, said Badruddin Khan, senior analyst with Angel Commodities.

Currently prices are around INR2,600/100 kg in Jaipur, a major trading hub in the western state of Rajasthan.