Govt intervenes in mustard trading, may bring relief amidst rising prices

By Vivek Puri

To begin, we'd like to thank the government for imposing a one-year ban on mustard futures trading on the NCDEX, which begun on December 20, 2021. This is a key intervention at a critical time, when the price of mustard and mustard oil has been rising, making this edible oil prohibitively expensive for middle-class clients.

Despite an MSP of Rs. 4600 per quintal, mustard oilseeds were being marketed at rates as high as Rs. 8000 per quintal on the open market. A large number of mustard oil customers were compelled to move to imported edible oils that were available at lower price points and cheaper brands of mustard oil that were typically polluted) as a result of the unrelenting and uncontrolled rise in mustard oilseed prices throughout the year. As a result, mustard oil production became uncompetitive.

The futures limitation is intended to decrease speculation and prevent the hoarding tendency of some major participants; such activity is known to cause considerable price swings, especially in a turbulent market.

In the current situation, the government must adopt a National Mustard Policy12, which we have been asking for for some years. Farmers, in particular, who are key stakeholders, should be a key emphasis of the policy.

In the United States, mustard is a very important crop. India is the fourth-largest producer of mustard in the world, accounting for more than 28% of the country's oilseed output. Despite significant hailstorm-related pre-harvest crop losses in Rajasthan, mustard output for 2020-21 hit an all-time high of 9.12 million tonnes.

Mustard and mustard oil have long been a part of India's culinary legacy, and establishing a National Mustard Policy would be a great way to conserve, protect, and promote this tradition. Furthermore, because India has long been capable of manufacturing traditional cold-pressed mustard oil, this local enterprise fits in nicely with the government's self-reliance objective, as demonstrated by the Atmanirbhar Bharat Abhiyaan. The government should take active measures to protect mustard oil against the entry of foreign edible oils as part of this endeavor.

Local enterprise fits nicely with the government's self-reliance objective, as demonstrated by the Atmanirbhar Bharat Abhiyaan. | Wikimedia Common

Allowing bulk export of branded mustard oil would be another important policy action in this direction. Only small packages are now allowed for the US and European Union markets, and they must be labeled "For External Use Only." The government should make a strong argument to the proper international regulatory authorities for the abolition of this inexact and misleading labeling requirement. Mustard oil has earned a global reputation as a natural, healthy cooking medium in recent years, and the export of Indian mustard oil has the potential to open up new opportunities for farmers and producers alike. With the establishment of a free-trade economy, the world has become a global village with continuously fluctuating consumer tastes.

The new National Mustard Policy should also consider expanding mustard planting in areas like Assam and Jharkhand, which have great meteorological conditions for mustard. The mustard crop requires two irrigation cycles throughout the growing season, and both states have significant water resources. Furthermore, the agricultural areas in those states are not used for any winter crops after rice harvesting, thus mustard growth might increase productivity and profitability for farmers there.

The approach should also assist organic mustard growing in India as part of the Atmanirbhar Bharat Mission. Consumption of organic products is increasing in urban areas as part of a healthy, holistic lifestyle.

Also read: Mustard Oil: An Entrusted Immunity Booster

Another major focus area is mustard oilcake (also known as Sarson Khal), which is sometimes disregarded despite its importance in the mustard value chain. The oilcake is mostly used in cow feed, but it may also be used as a chemical-free natural fertilizer in farming. The government should promote mustard oilcake development through research and investment. Any added value produced as a result of this research will benefit both dairy farmers and consumers, as mustard oil costs are expected to decline as a result.

Infrastructure, supporting systems, and networking capabilities are all required for the implementation of such a policy. We have previously lobbied for the establishment of a Mustard Oil Development Board for this reason.

(IANS/PR)

(Keywords: Banning futures trading in mustard, NCDEX, mustard oil, National Mustard Policy, Atmanirbhar Bharat Mission)