Soyabeans, and groundnuts prices may drop to MSP levels due to new arrivals
Ajay Jhunjhunwala, President of the Solvent Extractors’ Association (SEA) of India, says that soyabean and groundnut prices may fall to the level of the Centre’s MSP (minimum support price) by Diwali. This is because of the pressure of arrivals.
In a letter to the members of SEA, Jhunjhunwala said that a situation like this would be bad for farmers and make them less likely to grow oilseeds in the future.
He said that the price of edible oil on the international market had dropped sharply in the last five months, which was good news for consumers during the current festival season.
But, he said, the sharp drop in prices has caused domestic oilseed prices to drop close to the MSP, which worries the government, businesses, and farmers.
Given that the soyabean crop is expected to be a bumper 120 lakh tonnes (lt) and that there will be about 15 lt of carrying forward stock, the ‘mandi’ price is going down. It is currently quoted at ₹4,900 per quintal, while the MSP is ₹4,350 per quintal.
The groundnut crop is also looking good, and the harvest is well underway. Mandi costs ₹6,200 per quintal, which is more than its MSP of ₹5,850 per quintal.
He said that the ‘Storage Control Order’ should be gotten rid of because it doesn’t do anything useful and stops large companies and traders from buying, which helps the market price.
At least for international goods like crude soyabean oil and crude palm oil (CPO). He said that the government might think about raising the import duty on CPO and RBD palmolein by 12–15% to help domestic refiners by making better use of their capital, adding value, and creating jobs in the country.
This means that under the SAFTA agreement, Nepal and other SAARC countries won’t be able to send refined palmolein and refined palm oil into the country for free.
The minimum support price (MSP) for mustard seed has gone up by ₹400 to ₹5,450 per quintal. This is a good step, but he said the Government should protect the MSP by taking the right steps, such as raising the import duty.
Last year, SEA and Solidaridad set up more than 500 model farms for mustard in Rajasthan and Madhya Pradesh to boost production. This year, there are plans to build nearly 400 model farms in Rajasthan, 250 in Madhya Pradesh, and 100 in Uttar Pradesh. These farms will show how to improve farming methods and increase productivity, he said.