‘Duty-free import of palm oil is hurting domestic mustard market’

The SEA president wrote that the price of mustard — a major rabi crop in Rajasthan and Madhya Pradesh — has dropped below its Minimum Support Price of Rs 5,450 per quintal.

Jhunjhunwala cautioned that as the arrival of the mustard is increasing day-by-day, the prices may dip further.

The previous year, the prices of edible oil skyrocketed to Rs 200 per litre owing to the outbreak of the ongoing Russia-Ukraine war and crude oil trading at a high price in the international market.

Moreover, Indonesia, the largest edible oil producer, clamped the free export, making the oil more expensive.

To soften the prices, the government intervened and reduced duty and cess on edible oils and allowed free imports to ensure better availability.

Thus, from Rs 139.19 a liter on February 28, 2022, palm oil was trading at Rs 112.75, Soyaoil from Rs 151.35 to Rs 145.80 and vanaspati Rs 144.03 to Rs 135.81. Only sunflower, from Rs 156.66 to Rs 157.51, and groundnut, Rs 175.08 to Rs 189.40, reported a different trend, according to the data from the price monitoring cell of the Ministry of Food and Public Distribution.

However, the free import of palm oil led to the collapse of mustard seed prices in the domestic markets, the SEA head claimed. Moreover, the higher volume of imports is putting the domestic industry under stress.

To overcome the situation, Jhunjhunwala proposed an imposition of 20 per cent import duty on palm oil which would help mustard seeds retain their price and help the domestic refinery industry survive.