As prices fall below MSP, mustard farmers stare at losses for 2nd year in row

Neeraj Mohan

New Delhi, January 6

Mustard farmers are bracing for the second consecutive year of losses as prices of the widely-consumed oilseed witnessed a significant decline in the open-market.

As harvesting of early maturing varieties picking up in northern states such as Haryana and Punjab, and in parts of Uttar Pradesh, the prices have plummeted to approximately Rs 4,000 to Rs 4,300 per quintal. This represents a nearly 30 per cent drop from the Minimum Support Price (MSP) of Rs 5,650 set by the government for the oilseed.

Reports from mandis indicate that farmers were compelled to sell their produce to private traders due to absence of state-run agencies.

PRICES UNSTABLE

Even though arrival of mustard has commenced, traders are hesitant to buy the seeds due to unstable prices of mustard oil over the past year, driven by an increased in edible oil import. —Naresh Kumar, A commission agent from Kurukshetra

“I had to sell my four-acre produce at Rs 4,200 per quintal as there were only two buyers in Ladwa mandi. We are perplexed as to why the government has fixed the MSP at Rs 5,650 if there are no takers at that price,” Rajesh Kumar, a farmer from Kurukshetra, said.

Furthermore, the prices of last year’s mustard have also dropped to around Rs 4,800 per quintal. Traders, who had purchased mustard above the MSP of Rs 5,450 last year, are now concerned about the declining prices in the market.

Both traders and farmers attribute the falling mustard prices to a surge in edible oil imports. India’s November palm oil imports also rose by 22% from the previous month to 867,000 MT – the highest in the past three months.

Naresh Kumar, a commission agent from Kurukshetra, said: “Even though arrival of mustard has commenced, traders are hesitant to buy the oilseeds due to unstable prices of mustard oil over the past year, driven by an increased in edible oil import.”

Even, the Haryana State Cooperative Supply and Marketing Federation Limited were struggling to sell around 2.50 lakh MT of mustard seed procured at the MSP of Rs 5,450 per quintal. Despite repeated tenders, just 500 MT was sold at Rs 5,100 per quintal.

Traders anticipate further decline in mustard seed prices, with figures from the Solvent Extractors’ Association (SEA) of India revealing that the sowing area under mustard and rapeseed (Rabi) reached 97.2 lakh hectares by December 29 last year, compared to 95.6 lakh hectares in 2022.