The Solvent Extractors Association of India (SEAI) and The Soyabean Processors Association of India (SOPA) have urged the Centre to intervene by responding to falling mustard prices, which have dropped below the minimum support price in line with global trends. They have suggested that the government increase import duty on palm oil and support agencies such as NAFED in procuring and maintaining sufficient buffer stocks.
As the harvest gains pace, mustard prices have slipped below the MSP of ₹5,450 per quintal and are ruling lower by ₹500-700 across various mandis in the key producing regions of Rajasthan and Haryana. Similarly, the modal price (the rate at which most trades take place) of soyabean has eased by ₹200-300 per quintal over the past fortnight and is hovering between ₹4,200 and ₹5,000 across various mandis in Madhya Pradesh.
In a letter to the Agriculture Ministry, the SEAI said “there is an urgent need to protect the mustard farmers by defending the MSP announced by the Government.”
Palm oil imports
According to SEA, the imports of RBD palmolein have surged and now make up nearly 23 per cent of the overall palm oil imports in India. This is not only damaging the palm refining industry but also leading to a decline in mustard prices during the peak harvest season. “We suggest levying import duty on RBD palmolein and refined palm oil at 20 per cent or its import be put under the restricted category. This action will not only be in line with encouraging value addition within the country but also help raise mustard seed prices” Ajay Jhunjhunwala, President, SEAI said.
SEA has suggested that the Centre impose agri cess of 7.5 per cent on RBD palmolein imports, which will raise the effective duty structure on the commodity to 22 per cent. RBD Palmolein current attracts an import duty of 12.5 per cent. Including the social welfare cess of 10 per cent, the current effective duty on RBD Palmolein is 13.75 per cent.
Jhunjhunwala further suggested that agencies like NAFED should be encouraged to begin procuring at MSP from market yards in order to build sufficient buffer stocks that can be useful when edible oil prices begin to rise. The SEA president added that a buffer stock of mustard held by the government could also have a stabilising effect on domestic edible oil prices, while simultaneously providing mustard farmers with better prices for their crops.
Meanwhile, SOPAIndia, in a tweet, said the Indian oilseed prices crashed, reacting to global trends. “Mustard below MSP now. Very low duty on edible oils of 5.5 per cent is counterproductive for domestic sector. Request substantial increase in duty to keep Atmanirbharta momentum”, SOPA tweeted tagging the Prime Minister’s Office, Commerce Minister Piyush Goyal and Finance Minister, Nirmala Sitaraman.
Farmers have brought a record area under mustard this year and the output as per the second advance estimates is estimated to be at a record 128.18 lakh tonnes — about 7 per cent higher than the final estimates of 119.63 lakh tonnes produced in 2021-22.