Record mustard output of 14 million tonnes drags prices below MSP

As the new mustard crop has started arriving, farmers are disappointed with prices ruling below the minimum support price (MSP) in the market after increasing the production, which may touch 14 million tonnes (mt) this year. However, traders blame import of cheap edible oils contributing to the lower consumption of mustard oils and sluggish price for the oilseeds in the country.

Speaking to businessline on the sidelines of the ICAR conference of vice-chancellors of Central and State agriculture universities, PK Rai, director of Bharatpur-based Directorate of Rapeseed-Mustard Research Centre, said there will be a record production this year as per the indications coming from the harvested crop.

Mustard production in 2022-23 was 12.64 mt and the government fixed the target at 13.1 mt for this year. The acreage ended at 100.44 lakh hectares (lh), up from 97.97 lh last year. There was an over 32 per cent jump in acreage in Uttar Pradesh at 17.6 lh while it was marginally lower in Rajasthan. “Based on the current crop conditions, it can be assumed that the crop size will not be less than 14 mt,” Rai said. He attributed the rise to increased acreage of mustard in Vidarbha and Marathwada as well as in Jharkhand, Assam, eastern Uttar Pradesh and Bundelkhand regions.

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Average mandi prices

Out of the 1 lt of mustard which arrived in mandis (agri market yards) across the country during February 18-25, as much as 40,000 tonnes were reported from Rajasthan, the largest producer, followed by 23,000 tonnes in Madhya Pradesh and 19,000 tonnes in Gujarat.

Average mandi prices of mustard were ₹4,820/quintal in Rajasthan, ₹4,520/quintal in Madhya Pradesh and ₹4,858/quintal in Gujarat during February 1-25, lower than its minimum support price (MSP) of ₹5,650/quintal. Kisan Mahapanchayat president Rampal Jat said farmers are losing ₹1,200/quintal in selling mustard whereas all promises to buy at MSP seem to be only on paper. Referring to Union Agriculture Minister Arjun Munda’s direction to buy mustard at MSP, Jat said, “will bureaucrats ever implement the minister’s assurance.”

• Also read: SEA estimates record mustard crop, urges Centre to buy under MSP

Import of cheap oil

Traders and processors said that at least 15-20 per cent of the production of last year did not reach the market as farmers were holding on to the crop in expectation of better prices. They blamed the lower prices of mustard to “uncontrolled import” of cheaper edible oils from other countries.

“There is no reason why mustard oil consumption can’t be increased when it is consumed for edible purpose in north, east, north-east and western regions of the country,” said a former director of Central Organisation for Oil Industry and Trade (COOIT). He suggested the government should decide the imported duties on edible oils based on the mustard oil rate by factoring in the MSP of mustard.

With 42 per cent oil content and an MSP of ₹5,650/quintal, the mustard oil price will come to ₹135/litre for a processor, excluding his processing, branding, packaging, distribution, transport and handling and other costs, the industry official said, adding the current retail price is at least ₹10 lower than ₹135/litre in Delhi NCR.

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