Mustard Oil Producers Association (MOPA) of India stated on 10thOctober’22 that a fall in import prices of edible oil seeds such as mustard and soybean has pulled down their prices in Indian markets (mandi’s). The government has been urged to lift stock holding limits on edible oils and oil seeds at the earliest as the controls have hit the processing of oil seeds. India is dependent on importing edible oil. The landed prices of palm oil (at Mumbai port) which accounts for a 60% share in India’s edible oil imports have declined 36% to $930 per tonne as against $1452 per tonne in the previous year. Krishna Kumar Agarwal, the General Secretary of MOPA said,” Cheaper palm oil imports have impacted the mandi prices of soybean and mustard oil in recent months.”*
Stock Limits On Edible Oils And Oilseeds
On 1st April, the government extended stock limits on edible oils and oilseeds till 31stDecember’22 to curb the rise in prices. Before this, in October 2021, the government imposed stock-holding limits on edible oils and oilseeds till 31stMarch’22 but the quantities for the stock limit were left to the state and Union Territories representatives to decide based on their respective consumption patterns. As per the stock holding limits, retailers can hold only up to 30 quintals of edible oils and 100 quintals of oilseeds while wholesalers can hold up to 500 quintals of edible oils and 2,000 quintals of oilseeds in one go. Processors of Edible Oils would be able to stock storage capacities of 90 days and on the other hand, processors of oilseeds would be able to stock 90 days of production of edible oils as per the production capacity daily requirement.*
Current Scenario
Within the last 4 months, the prices of imported edible oil have fallen 40-45%. MOPA noted that “as a result, the price of soybean seeds which was selling at around Rs 9,500 per quintal last year, is now selling at Rs 4,500 per quintal.” Likewise, mustard seed prices are currently around Rs 6,000 per quintal as against Rs 8,500 per quintal in the previous year. Agarwal stated that “Lower prices realized by farmers could discourage them to shift to oilseeds cultivation”* Import and Export Edible Oil Globally
Central Organisation for Oil Industry and Trade (COOIT) in its communication to the Finance Ministry recently said that the harvesting of Kharif crops would start in the coming few months and many commodities would start coming into the mandis. In the absence of future markets, a reference price won't be available which would make operating in spot markets difficult.
Institutions and bodies such as the Solvent Extractors’ Association of India, Central Organisation for Oil Industry and Trade (COOIT), MOPA along with a number of farmer-producer organizations have called for the lifting of the futures trade ban imposed on edible oil in December 2021 to ensure risk management and avail price discovery mechanism. India is dependent on Edible Oil Imports with around 14 million tonnes (MT) or two-thirds of the total estimated annual consumption of 22 MT met through its imports. Around 8 mt of palm oil is imported from Malaysia and Indonesia, while other oils, such as soya and sunflower, are imported from Argentina, Brazil, Ukraine, and Russia.
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Edible oils contain one of the three significant classes of foods, starches, fats, and protein.
Edible oils can be gotten from earthly or amphibian creatures, from the seeds or leaves of shifted plants, from the mash, or the nut/stone of numerous organic products.
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India also produces 9 types of Oilseeds making it the world’s 4th Largest OilSeed Producing Country following the USA, China, and Brazil.
