Govt to buy 3MT mustard from farmers
NEW DELHI: The Union agriculture ministry, which projected mustard output at a record 12.69 million tonne, has begun buying the oilseed as market prices have started falling below minimum support prices due to a bumper harvest.
The ministry has targeted buying nearly three million tonne of mustard under the government’s price support scheme in the key producer states of Rajasthan, Haryana, Uttar Pradesh, Madhya Pradesh and Assam, an official said, requesting anonymity.
Under the scheme, the government buys oilseeds and pulses when their rates fall below federally fixed floor prices, helping farmers to book a profit.
So far, two state-backed cooperatives — the National Agricultural Cooperative Marketing Federation and National Cooperative Consumers Federation — have bought 80,000 tonne of mustard in these states. Procurement is expected to pick up in the coming weeks, a second official said, declining to be named.
Prices of mustard seed at Bharatpur in Rajasthan, one of the country’s largest trading centres, were around ₹5,100 per quintal (100 kg) against a minimum support price of ₹5,650 a quintal for the 2023-24 season.
In February, farm minister Arjun Munda announced the Centre would purchase mustard directly from farmers at the minimum support price should rates fall below the floor price.
India’s import of edible oils, including palm and sunflower, rose 17.4% on year to a record 16.50 million tonne in the 2022-23 oil year (NovemberOctober) due to lower import tariffs of only 5.5% on crude imports.
The Union government has extended the lower import duty structure for palm, soybean and sunflower oils till March 31, 2025. Retail inflation in mustard oil in February declined by 18.14% from a year ago. India imports about 58% of its annual edible oil demand of around 25 million tonne.
In April 2022, the Centre allowed duty-free import of two million tonnes each of crude sunflower and soybean oil till the end of 2024. Since this reduced the cost of import, the Centre held several rounds of meetings with processors of edible oil to pass on the benefits of lower prices to consumers.
In June last year, the Centre cut the basic import duty on refined soybean oil and refined sunflower oil from 17.5% to 12.5%, a move that cooled prices. Inflation in oil and fat category in July 2023 declined by 16.80%. Import duties on the two items were last reduced from 32.5% to 17.5% in October 2021, when international prices had soared to multi-year highs.