Mandi prices of mustard rises above MSP after govt purchases
Mandi prices for mustard, which were below the MSP of Rs 5650/quintal earlier, have now risen to or above MSP due to procurement under the price support scheme (PSS). Agencies like Nafed and NCCF, along with state bodies, have bought 1.12 MT of oilseeds, focusing on Madhya Pradesh, Haryana, and Rajasthan. Despite record production projections, imports and slashed duties have kept prices subdued. India’s reliance on imports, especially with lowered tariffs till March 2025, impacts oil inflation, notably in mustard oil.
The mandi prices of mustard, which ruled significantly below the minimum support (MSP) of Rs 5650/quintal for the 2024-25 season (April-June) for the last two months have been currently ruling around MSP, due to procurement of oilseeds by the agencies under the price support scheme (PSS).
Official sources told FE that prices across key mandis have either crossed MSP or at par.
Officials said the two agencies — farmers’ cooperative Nafed and National Cooperative Consumers Federation (NCCF) — in collaboration with state agencies have purchased 1.12 million tonne (MT) or around 9% of oilseeds variety output this season under PSS operations in Madhya Pradesh, Uttar Pradesh, Gujarat, Haryana, Rajasthan and Assam.
However, major purchases of mustard have been in Madhya Pradesh (0.36 MT), Haryana (0.32 MT) and Rajasthan (0.34 MT). The agriculture ministry has sanctioned the purchase of 2.84 MT of oilseeds variety or 25% of the production under PSS in the current season which according to officials is likely to continue till July15.
While in 2020 and 2021, the farmers have received remunerative prices which were reasonably above the MSP, prices have been ruling below MSP since last year as there has been an increase in imports of edible oil as global prices have softened and the government has slashed import duties.
In February, 2024, the government had announced that the Centre would purchase mustard directly from farmers at the MSP aimed at bringing stability in the market.
The Solvent Extractors Association, a leading body associated with the edible oil industry, in its first estimate, has projected mustard seed output at a record 12.08 MT for 2023-24 season, 7% up on-year.
The agriculture ministry, as per the third advance estimates of crop output recently, had projected mustard seed production at a record 13.16 MT in the 2022-23 crop year (July-June).
India’s import of edible oils – palm, soybean and sunflower – rose 17% on year to a record 16.47 MT in the 2022-23 oil year (November-October), helped by lower import tariffs of only 5.5% on crude oil imports.
The government has extended the lower import duty structure for palm, soybean and sunflower oils till March 31, 2025.
Due to large import of edible oil, the retail inflation in oil and fat category had been in the negative zone since February, 2023. Retail inflation in mustard oil in May, 2024 declined by 8.59% on year.
India imports about 60% of the total annual edible oil consumption of around 25 MT. Share of domestic edible oil includes mustard (40%), soyabean (24%) and groundnut (7%) and others.
Source Link : https://www.msn.com/en-in/money/markets/mandi-prices-of-mustard-rises-above-msp-after-govt-purchases/ar-BB1oON3u