Mustard Prices Might Increase in July

Mustard Prices Go Below Minimum Support Price In India

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Record Breaking Crop Production in India

The mustard industry faces a significant challenge as the new crop season witnesses a record output of approximately 14 million tonnes. Despite the anticipation of improved returns with increased production, farmers find themselves disheartened by the prevailing market prices, which fall below the minimum support price (MSP). Traders attribute this downward trend to the influx of cheap edible oils from foreign markets, which has curbed the demand for mustard oil and consequently suppressed prices.

Implications of Surging Production

The Director of the Bharatpur-based Directorate of Rapeseed-Mustard Research Centre anticipates a historic production yield for the current year based on preliminary assessments from harvested crops. In contrast to the previous year’s mustard production of 12.64 million tonnes, the government had set a target of 13.1 million tonnes for the ongoing season. Notably, the acreage dedicated to mustard cultivation has expanded to 10.044 million hectares, with Uttar Pradesh witnessing a substantial 32% increase in acreage. The production is also attributed to expanded cultivation in regions such as Vidarbha, Marathwada, Jharkhand, Assam, eastern Uttar Pradesh, and Bundelkhand.

The Price Battle Of Mustard

The arrival of mustard in agricultural markets during the ongoing season indicates a robust supply chain, with Rajasthan, Madhya Pradesh, and Gujarat emerging as the primary contributors. However, despite the healthy supply, average prices continue to lag behind the MSP, causing distress among farmers. For example, Rajasthan recorded average mustard prices at $0,58/kg or €0,65/kg, Madhya Pradesh at $0,54/kg or €0,61/kg, and Gujarat at $0,58/kg or €0,65/kg. These figures are notably below the Minimum Support Price (MSP) of $0,68/kg. Farmers are expressing disillusionment, highlighting losses in mustard sales and raising concerns about the effectiveness of MSP assurances from government authorities.

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Impact of Imported Oils on the Domestic Market

Traders and processors voice concerns over the unbridled import of cheaper edible oils. This has inundated the market, adversely affecting mustard prices. A substantial portion of last year’s production remains unsold as farmers hold onto their crops in anticipation of improved pricing. The consumption of mustard oil, which holds significant dietary importance in various regions across the country, faces stagnation despite its versatile usage. Industry experts advocate for governmental intervention to regulate imported duties on edible oils, considering the MSP of mustard as a benchmark for policy decisions.

In conclusion, the mustard market grapples with the complexities of oversupply, fluctuating prices, and the adverse impact of imported oils. Exporters remain vigilant of market movements and governmental policies to mitigate risks and capitalize on emerging opportunities in the mustard industry.

 

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