Mustard Prices Fall Under the Pressure of Heavy Arrivals, Inexpensive Imported Edible Oil

Agra: On account of bumper crops and the accessibility of low-cost imported edible oils, Mustard seed prices are plummeting, stressing many growers as the fresh crop is being harvested, which in turn lowers the cost of Mustard Oil in the Indian domestic market. The price of Mustard seeds, a major Rabi crop in Rajasthan and Madhya Pradesh, has dropped below the Minimum Support Price (MSP) by more than 5,200 per quintal in market yards, putting Mustard farmers in a huge deficit situation.

The arrival of Mustard seeds is growing daily, but the Indian government anticipates more price drops. Due to the commencement of the ongoing Russia-Ukraine war and the high price of Crude Oil in the global market, Edible Oil, among other things, has spiked to Rs 200 per liter in the previous year. Moreover, Indonesia, the world's largest producer of Edible Oil, likely Palm oil, restricted unfettered export, raising the price of the Oil in the global market. The government intervened to lower prices, lowered the duty and cess on edible oils, and permitted free imports to increase the supply of Palm Oil. For a while, the cheap import of Palm Oil caused the domestic markets' Mustard seed prices to fall. Also, the increased import volume is pressuring the domestic industry.

During the month of February 2023, the standing Mustard crop appeared to be in good health, and earlier reports of hailstorms and ground frost in some areas of Haryana were more limited and had little influence on the Mustard crop overall. Given the highest-ever sowing of 9 Million Hectares (MH) this season and the current favorable weather conditions in important producing zones, Mustard seed output was predicted to set a record. The nation's reliance on imported edible oils, such as Sunflower Oil, is projected to decrease. As a result, prices are currently being impeded despite this anticipation.

As per the ChemAnalyst database, the Edible Oil sector has been spurred by this to seek quick action to stop the decline. The corporate sector has recommended asking government organizations like the National Agricultural Cooperative Marketing Federation of India (NAFED) to buy Mustard seeds and support the MSP.