Mandi prices of key oil seeds below MSP despite tariff hike
Soybean output in India has increased by nearly 6% to 12.6 million tonnes in the current kharif season, aided by favorable weather, according to SOPA. However, mandi prices remain below the MSP despite increased import duties on edible oils. The government has begun procurement operations under the Price Support Scheme in Telangana and Maharashtra, with more states to follow. Additionally, groundnut prices are lower than the MSP, partly due to reduced byproduct prices like groundnut oil cake.
According to the Soybean Processors Association of India (SOPA), output of key oilseed variety, has increased to 12.6 MT in the current kharif season, nearly 6% increase on year to due to favorable weather conditions.
More than a month after the government increased import duty on edible oils, mandi price of soybean, a key kharif oilseeds continue to rule below the minimum support price (MSP). Government agencies have commenced procurement operations of oil seeds in Maharashtra and Telangana under Price Support Scheme (PSS).
Official sources told FE that average mandi prices of soybean currently is ruling in the range of Rs 4500 to Rs 4700/quintal against the MSP of Rs 4,892/quintal for the 2024-25 season (July-June).
“Procurement under price support scheme – PSS — by agencies have commenced from October 7 in Telangana followed by Maharashtra,” an agriculture ministry official said, adding that purchase of soybean would begin in the next couple of weeks in Madhya Pradesh, Karnataka and Gujarat.
Trade sources said despite a significant increase in the import duties for both crude and refined oils – palm, soybean and sunflower, mandi prices of dometic oilseeds — are not increasing because of lower price of meals, by products of oilseeds used as feed in the livestock industry.
Last month, when mandi prices were below the MSP due to low import duties on edible oil, the agriculture ministry had approved the purchase of 2.92 million tonnes (MT) of soybean from farmers in Madhya Pradesh (1.36 MT), Maharashtra (1.3 MT), Karnataka (0.1 MT), and Telangana (0.05 MT) at MSP under the price support scheme (PSS) in the kharif 2024. The MSP purchase operations are being carried out by NCCF and farmers’ cooperative Nafed in collaboration with the state government.
Meanwhile, Sameer Shah, president, Gujarat state edible oils and oil seeds association, said that mandi prices of groundnut, another kharif oilseed, is currently ruling around Rs 5500/quintal against the MSP of Rs 6783/quintal for the current season.
Shah said groundnut oil cake used as animal feed is current ruling around Rs 2300/quintal against Rs 3600/quintal prevailed a year agon while distiller’s dried grains with soluble (corn – DDGS) after its used for ethanol prices are around Rs 1700/quintal.
According to the Soybean Processors Association of India (SOPA), output of key oilseed variety, has increased to 12.6 MT in the current kharif season, nearly 6% increase on year to due to favorable weather conditions.
Last month, the government recently raised import duties on crude palm, soybean, and sunflower oils to 27.5% from 5.5%, while duties on refined edible oil rose to 35.75% from 13.75%. This implies a net increase of 22% on both crude and refined edible oils, making imports significantly more expensive.
In the last rabi season, despite having a record mustard production of 13.16 MT in 2023-24 crop year (July-June), the mandi prices were ruling below the MSP and the government agencies had purchased 1.2 MT of mustard from the farmers in key producing states of Haryana, Madhya Pradesh, Rajasthan and Uttar Pradesh.
The mustard produced by Nafed is currently being offloaded in the market.
India imports about 58% of its edible oil consumption of 24-25 million tonnes (MT).
Source Link : https://www.financialexpress.com/policy/economy-mandi-prices-of-key-oil-seeds-below-msp-despite-tariff-hike-3642967/
