Faced with multiple challenges involving labour shortage, supply chain disruptions and raw material sourcing, the mustard oil producing industry eyes at least 3-4 weeks to restore operations.

The new mustard crop harvest has begun and the industry anticipates a good crop. However, supply disruptions triggered by the lockdown since March 25 have made seed availability a challenge causing a temporary spurt in the prices.

Vivek Puri, Managing Director, Puri Oil Mills Limited - which markets P Mark Mustard Oil, said the oil prices have risen due to disruptions affecting the cost-sensitive industry and the consumers alike.

“We anticipate the entire process will take 3 to 4 weeks to streamline even though the Government is trying very hard to alleviate the hurdles across the entire process,” said Puri. He added that labour availability remains a major concern as many are fearful of contracting the infection, while for others transportation is still an issue.

The labour issue is also felt at the distributor level, who find it difficult to unload consignments and distribute goods onward to the retailers.

“The manufacturing plants, especially in Himachal Pradesh, are facing such issues on a major scale. Other plants in Punjab and Haryana are also running at sub-optimal levels,” he said adding that ambiguity over catagorisation of mustard oil cake (a by-product) used as cattle feed as an essential item prompted factories to operate at sub-optimum levels.

Puri also highlighted the plight of packaging industry, which was only recently allowed permission for movement. Hence, securing required packaging materials such as ready-to-use caps, pet jars, bottles, tin, pouches, labels and corrugated boxes remained a challenge.

“The back-end sourcing of raw material and labour problem persists even for the manufacturers and suppliers of packaging material. Hence this process will take some more time to streamline,” Puri added.

There are around 7,000-9,000 mustard oil extracting units, of which 25-30 per cent are registered in the organised sector. The industry has an installed capacity for processing 7.5 million tonnes annually of mustard seeds annually.

Published on April 17, 2020