NEW DELHI: After production loss in mustard crops due to inclement weather in February and March, farmers are now facing low market prices for their produce. The mustard crop wholesale price is way below the minimum support price (MSP) of Rs 5,450 per quintal.
The cheaper import of palm oil, soy oil and sunflower oil and the price disparity are two major reasons behind it.
Mukesh Kumar Yadav, a farmer from the Alwar district of Rajasthan, held his mustard crop at home due to lower prices.
“I have already suffered production loss of up to 30 per cent due to inclement weather,” Yadav told to this newspaper.
In his Chandigarh Ahir village, some villagers sold off at lower prices as they needed cash. “Once the price goes up, many of us would sell to compensate our loss. Last year, I sold mustard at Rs 7,000 per quintal,” he adds.
Mustard constitutes India’s one-fourth of total edible oil production and consumption. Alwar and Bharatpur districts are the country’s largest producers of mustard crops. Rajasthan tops in terms of total area (41 per cent) and total mustard production (45 per cent), followed by Haryana, MP and UP.
“Around 50 per cent of mustard oil mills have closed down in Rajasthan due to crushing price disparity in oil and oil cake,” says Manoj Shukla of Agriworld, an oilseed commodity analyst based out of Mumbai.
“Oil price is higher while oil cake is lower and due to which millers incur a loss of up Rs 3,000 per tonne. So, these oil millers chose not to buy it until government take steps in controlling cheaper imports,” says Shukla.
According to the Solvent Extractors’ Association of India, in March 2023 import of vegetable oils was up by 8 per cent compared to February 2023.
Palm Oil imports are up by 24 per cent to 7.28 lakh tons from 5.86 lakh tons. In January, Sunflower oil imports surged to 4.61 lakh tons, nearly triple the average monthly imports.