As the new mustard crop begins arriving, farmers face prices below the minimum support price (MSP), despite an increase in production, which is expected to reach 14 million tonnes (mt) this year. This situation arises amid the backdrop of the import of cheap edible oils, which traders cite as a reason for the reduced consumption of mustard oil and sluggish prices for the oilseeds. Mustard production for the 2022-23 period was 12.64 mt, with the government setting a target of 13.1 mt for the current year. The acreage for mustard cultivation increased to 100.44 lakh hectares (lh), up from 97.97 lh last year, with a significant increase in Uttar Pradesh.
During February 18-25, 1 lakh tonnes (lt) of mustard arrived in mandis across the country, with Rajasthan reporting 40,000 tonnes, Madhya Pradesh 23,000 tonnes, and Gujarat 19,000 tonnes. The average mandi prices of mustard were ₹4,820/quintal in Rajasthan, ₹4,520/quintal in Madhya Pradesh, and ₹4,858/quintal in Gujarat, all below the MSP of ₹5,650/quintal. The discrepancy between the MSP and market prices leads to significant losses for farmers.
The import of cheaper edible oils has been blamed for the lower prices of mustard, as it competes with domestic production. It is suggested that government decisions on import duties for edible oils should consider the MSP of mustard to ensure competitiveness. With a 42% oil content and an MSP of ₹5,650/quintal, the cost for mustard oil production reaches ₹135/litre for processors, not accounting for additional expenses. However, the current retail price is reported to be at least ₹10 lower than this figure in the Delhi NCR area.