The central government’s National Agricultural Cooperative Marketing Federation (Nafed) plans to procure a large quantity of mustard seed at the minimum support price (MSP).The MSP is Rs 4,200 a quintal (qtl); the wholesale price is now Rs 3,500-3,700 a qtl. Hence, the entry of Nafed will be a big relief for growers making distress sales amid a forecast of a record high output.
“We are waiting for the (central) government’s order to start MSP operations. We would purchase the last seed available for sale,” V R Boda, chairman of Nafed, told this publication.
Normally, mustard seed harvesting starts by early March. Oilseed crushing mills, warehousing companies and trading houses invariably build their inventory ahead of the entry of government agencies such as Nafed and state co-operatives.
“Seed arrival gradually improved around Holi across major producing states. We hope Nafed enters with an aggressive buying plan but not hold its procured quantity for long, as it did a couple of years ago. We would like the entire mustard seed to be available for crushing this season,” said B V Mehta, executive director of the oilseed mills body, the Solvent Extractors’ Association (SEA).
Nafed had procured around four million tonnes (mt) of mustard seed a few years earlier, when its price fell below the MSP. However, the agency held the entire quantity and sold in the lean season, angering the mills, whose operating capacity was idle in the main season.
SEA’s recent survey forecasts output at 8.5 mt this year, the highest ever. The agriculture ministry’s estimate for last year is 8.32 mt. Another trade body, the Central Organisation for Oil Industry and Trade, has forecast 8.7 mt for 2018-19.
The edible oil industry globally is passing through stress due to changes in biofuel norms of the European Union, which has reduced the latter’s consumption of crude palm oil (CPO). Hence, Malaysia and Indonesia, the main producers of CPO are, complains the Indian industry, dumping their produce into alternative markets, including India. Thus dragging down the price of all edible oils and oilseeds.
“Immediate policy support is needed for farmers to overcome the price fall menace. In view of the bumper crop, its oil should be allowed to be exported in bulk,” said Atul Chaturvedi, an industry veteran.
In March last year, the central government allowed export of all other edible oil but not of mustard oil. With additional seed output, the industry is expecting at least 600,000 tonnes of more oil this season.