After pulses, retail prices of mustard oil have started to move northwards in the past few months due to lower output last year. The rates are expected to rise further in the next couple of months as demand for the oil usually rise during winter season.
A chunk of mustard crop in rabi or winter season got adversely impacted due to unseasonal rains witnessed in March and April earlier this year, thus affecting the output. The rapeseed-mustard output in 2014-15 declined by 20% to 6.3 million tonne in comparison to the previous year.
According to agriculture ministry data, the standing rabi crop (including mustard) in around five million hectares of land in Uttar Pradesh, Maharashtra, Punjab, Rajasthan and West Bengal was damaged by the unseasonal rains earlier this year.
“Prices of mustard oil have increased by around 40% compared to last year’s across key cities. Last October the retail prices were ranging from R95-R105 per litre which has increased to R120-140 per litre this year,” Umesh Verma, spokesperson, Puri Oil Mills, promoter of P-Mark mustard oil, told FE. Verma said the prices are expected to rise till March 2016 before moderating on the arrival of new crop.
However, according to Mustard Research Promotion Consortium (MRPC), the output in the next rabi season (2015-16) is expected to increase due to prevailing conducive weather conditions and existing soil moisture because of late monsoon rains. “As farmers have received better returns this year due to lower production, there will be more area under mustard in the next rabi season,” an MRPC official said.
While mustard oil prices have firmed up, the retail prices of palm oil, mostly imported from Indonesia and Malaysia, have declined compared to last year. According to industry estimates, edible oil imports are likely to increase to 14 million tonnes in the 2014-15 oil year (November-October) from 11.6 million tonne a year back. India imports more than 50% of its annual edible oil requirement of 22-24 million tonne.
In September, the government had hiked import duty on edible oil by 5% for safeguarding the domestic industry.
The duty on crude edible oil was increased from 7.5% to 12.5% and on refined edible oil from 15% to 20%.
Soyabean, groundnut and rapeseed-mustard are the major oilseed crops in the country. These crops together contribute 88% of the total oilseeds production. In last few years, the country has developed hybrid varieties that give higher seed and oil yield — oil extraction has increased to 40% from 33%.
Mustard is grown only in the rabi or winter season mostly in Haryana, Rajasthan, Punjab and Madhya Pradesh.