A fall in import prices has pushed down Mandi prices for edible oilseeds like mustard and soybeans, the Mustard Oil Producers Association (MOPA) said Monday. It also called on the government to immediately lift storage restrictions on edible oil and oilseeds. Those controls, MOPA said, hit the processing of oilseeds.
Land prices for palm oil (at the Port of Mumbai), which accounts for 60% of the country’s cooking oil imports, fell 36% to $930/t on Oct 7 from $1,453/t a year ago.
“Cheaper palm oil imports have impacted Mandi prices of soybean and mustard oil in recent months,” Krishna Kumar Agarwal, secretary-general of MOPA, told FE.
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MOPA noted that imported cooking oil prices have fallen by 40-45% over the past four months, “as a result, the price of soybean seeds, which sold at around 9,500 euros per quintal last year, is now in the sell-off at ` 4,500/dtn.”
Similarly, mustard seed prices are currently around `6,000/sq. compared to `8,500/quintal a year ago. “Lower prices farmers are getting could discourage them from switching to growing oilseeds,” Agarwal said.
To curb the price increase, on April 1, the government extended the storage limits for edible oils and oilseeds until December 31, 2022.
In October 2021, the government imposed stockpile restrictions on edible oils and oilseeds until March 31, 2022. However, the amounts of stockpile restrictions on edible oils and oilseeds have been left to the state and union territories to decide based on their respective consumption patterns.
According to inventory limits, retailers may only hold up to 30 quintals of cooking oils and 100 quintals of oilseeds, while wholesalers may hold 500 quintals of cooking oils and 2,000 quintals of oilseeds at a time.
Edible oil processors could store 90 days of their storage capacities, while oilseeds processors could store 90 days of edible oil production according to the daily needs of production capacities.
Recently, bodies such as the Solvent Extractors’ Association of India, the Central Organization for Oil Industry and Trade (COOIT), the MOPA, as well as a number of farmer-producer organizations have called for the lifting of the futures trading ban imposed on edible oil in December 2021 to ensure risk management and the pricing mechanism.
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COOIT had recently said in its note to the Treasury: “Harvesting of the kharif crop will begin in the next few months and many commodities will come into the Mandis and in the absence of futures markets there is no reference price available that would allow operations to take place on the.” spot markets difficult.”
India is dependent on imported cooking oils, with around 14 million tonnes (MT) or two-thirds of the estimated total annual consumption of 22 MT being imported. Around 8 million tons of palm oil are imported from Indonesia and Malaysia, while other oils such as soybean and sunflower come from Argentina, Brazil, Ukraine and Russia.
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