Bumper harvest, imports depress mustard prices
By Sandip Das
Projection of a bumper harvest and higher imports of edible oils has impacted domestic mandi prices of mustard, a key oil seed, which is currently ruling below the minimum support price (MSP), traders and farmers said.
While harvesting is currently in the full swing in key producing states, mandi prices of mustard seed, at Bharatpur (Rajasthan), the hub of the country’ trade was ruling around average price of Rs 5100/quintal on Monday against a minimum support price of Rs 5650/quintal for 2023-2024 season.
This is the second year in a row mustard prices are ruling below MSP because of surge in imports.
Roop Singh, CEO, Uttan Mustard Producers Company, a FPO based in Bharatpur told FE that while in 2020 and 2021 the farmers have received remunerative prices which was reasonably above the MSP, prices have been ruling below MSP since last year as there has been increase in imports of edible oil as global prices have soften and the government has slashed import duties.
“The government must intervene to provide MSP to farmers,” Singh said. Sources said that MSP operations from oilseeds by the government agencies are likely to commence from April 1.
India’s import of edible oils – palm, soybean and sunflower – rose 17% on year to a record 16.47 million tonne (MT) in the 2022-23 oil year (November-October), helped by lower import tariffs of only 5.5% on crude oil imports.
The government has extended the lower import duty structure for palm, soybean and sunflower oils till March 31, 2025.
Due to large import of edible oil, the retail inflation in oil and fat category had been in the negative zone since February, 2023 as global prices softened. Inflation in cooking oil declined by 14.96% in January, 2024 on year.
“Mustard seeds are available in the open market below the MSP and there has been a better output of mustard seeds in terms of quality and quantity,” Umesh Verma, spokesperson of P-mark, a leading brand of mustard oil, said.
The agriculture ministry, as per the second advance estimates of crop output recently, had projected mustard seed production at a record 12.69 MT in the 2022-23 crop year (July-June).
P K Rai, director, directorate of rapseeed-mustard research, a Bharatpur, Rajasthan based institute affiliated to Indian Council for Agricultural Research said that the output is likely to be higher due to conducive weather conditions this season.
Area under mustard in the current rabi season has been reported at a record 9.8 million hectare (MH) which is 64% more than last five years’ average sown area of 6.4 MH.
In the 2021-22 season, mustard sown areas stood at 9.1 MH. Average area under mustard for the last five year has been 7.3 mh.
Currently, Rajasthan (40%), Madhya Pradesh (14%), Uttar Pradesh (9%) and Haryana (7%), have 70% share in the country’s mustard seed production.
India imports about 58% of the total annual edible oil consumption of around 24 to 25 MT. Share of domestic edible oil includes mustard (40%), soyabean (24%) and groundnut (7%) and others.
This article has been republished from The Financial Express.