Agri Business

India’s edible oil security at risk: SEA

Rutam Vora Ahmedabad | Updated on January 12, 2018 Published on June 08, 2017

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At a time, when farmers are exploring various profitable crop options for cultivation during the upcoming kharif sowing season, the sustained low prices of oilseeds may make farmers dis-interested towards oilseeds cultivation thereby putting India's edible oil security at risk.

Key edible oil prices including soybean, rapeseed and groundnut prices have declined in the range of 20-28 per cent since June last year. Against the Minimum Support Price (MSP) of ₹2,775 per quintal, soybean prices quoted at ₹2,550, while rapeseed prices hovered around ₹3,250 a quintal against the MSP of ₹3,700 and groundnut prices quoted at ₹3,500 a quintal against the MSP of ₹4,220 a quintal.

Prices lowest in five years

The South-West Monsoon has already marked its entry from Kerala and is expected to cover the whole of the country in the next 10-15 days.

“However, the current price level is the lowest in the last five years and farmers are totally discouraged to sow oilseeds in the current kharif season.

Further, there is hardly any market intervention operation to support the price level,” said Atul Chaturvedi, president, Solvent Extractors’ Association of India (SEA).

In a letter written to Prime Minister Narendra Modi, Union Finance Minister Arun Jaitley and Agriculture Minister Radha Mohan Singh, the SEA raised key concerns of sustained lower prices below the MSP of the oilseeds.

“After two years of drought, the current year witnessed oilseed production rebounding. However, the increase in production has not brought any cheer to our farmers as prices have collapsed below the MSP levels.

This has happened probably for the first time in decades and needs immediate action,” SEA wrote in its letter dated June 5. The SEA suggested remedial measures to ensure farmers do not loose total interest in oilseed cultivation.

Remedial measures

“Import duties on crude oils should be raised to 20 per cent from a level of 7.5 per cent on crude palm oil and 12.5 per cent on soft oils with immediate effect. Import duty on refined oils should be raised to a minimum 35 per cent from the current level of 15 per cent on palmolein and 20% on other Refined Oils,” it said.

Meanwhile, as the companies prepare for the rollout of the Goods and Services Tax next month, purchases have come to a minimum thereby putting additional downward pressure on oilseeds.

Published on June 08, 2017
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