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Mustard Oil Producers Association Of India (MOPA) will be organizing seminar on mustard industry, the annual event, on 15 March 2015 in Jaipur, Rajasthan. Mr. Satyendra Kumar Shukla, Vice President of the association spoke to Kamal Sharma, Editor with commoditiescontroal.com on various issues faced by the industry currently. Given below are excerpts from the conversation-
CC: What is Mustard Oil Producers Association’s (MOPA) Objective For Holding Seminar?
Mr Shukla: The Association organises this seminar every year. At the seminar, we assess mustard production, opening stock, demand and supply of mustard oil and other related issues faced by the industry. Industry experts submit their view on various issues. The seminar is very helpful for industry to understand probable price fluctuation for the next marketing year (April to March). Prominent personalities from the trade represent their view point in the seminar. To name the few, Mr Atul Chaturvedi from Adani Group, Mr Govind Bhai Patel of GGN Group, Mr D P Khandelia, Mr Laxmi Chand Agrawal and Rajasthan Agriculture Minister Mr Prabbhu Lal Saini will share their views on the industry at the seminar. Around 1,300-1,400 industry delegates across the globe are expected to participate in the seminar.
CC: What Will Be The Highlight Of This Year’s Seminar?
Mr Shukla: We will request Rajasthan government to declare Rajasthan as ‘Mustard State’. The state contributes around 50% of total mustard production in the country. Last year, the state has produced nearly 65 lakh tonnes of mustard. Production in the state is estimated to fall to 60 lakh tonnes this year, but the final assessment may be presented in the seminar.
CC: How Did The Recent Rains Across The Country Impacted Mustard Crop?
Mr Shukla: Mustard growing farmers were already aware of the rain forecast by the weather department. So they had safely stored the harvested produce. However, the crop which is on the fields will get delayed for harvesting. We expect no loss to standing crop. Mustard crop in Sri Ganganagar of Rajasthan and few areas of Haryana is likely to benefit from unseasonal rains. Moreover, rise in oil percentage can be expected in mustard crop in these areas.
CC: What Do You Think About The Current Import Scenario In The Country?
Mr Shukla: This year, imported oil is being sold Rs 2 per kg cheaper compared to last year. There is shortage of oil and importers are indulging in forward deals. Soya degum is available at Rs 585/10 kg. For June delivery, the commodity is available at Rs 570/10 kg. Soya refined oil is available at Rs 610 at port delivery. Canola is being traded at Rs 580 at Kandla port. Port delivery sunflower crude is being offered at Rs 625 and sunflower refined at Rs 665/10kg.On the whole, almost all edible oils are available at cheaper rates compared to last year. Last year, prices of these oils was Rs 2 per kg higher.
CC: What Is Your Take On Mustard Price Trend This Year?
Mr Shukla: Mustard contains 40-42% oil. This year, prices of mustard and mustard oil will depend on DOC (mustard meal). Export of DOC will influence the prices. Farmers sell DOC partly and retain some for using as a cattle feed. India exports around 8-9 lakh tonnes mustard meal. Countries such as China imports 3.4 lakh tonnes mustard meal from Bangkok and Singapore. Domestic consumption is estimated at 12-14 lakh tonnes. Domestic demand is growing at annual rate of 30%. Bangladesh is the new importer of Indian mustard meal. Bangladeshi farmers use meal as fertilizer for betel (Paan) farming.India exports 2-2.5 lakh tonnes mustard meal to Bangladesh.
CC: What Challenges The Mustard Oil Industry Is Facing Currently?
Mr Shukla: To talk about the present scenario, domestic mustard oil industry is facing a tough challenge from canola oil.Canola oil is almost as good as mustard in terms of properties. Being imported from Canada, this oil is relatively cheaper to mustard oil.
Around 20,000 tonnes canola oil is stocked at various ports and another 20,000 tonnes is expected to reach India. Canola oil is available at Rs 600/10kg, while mustard oil (Kachchi Ghani) is sold at Rs 710-715/10kg. Canola is blended because of cheaper price. Around 30-40% canola oil is blended with mustard oil. On top of that, only 7.5% import duty is levied on canola oil. We request the central government to raise duty to 15% in order to protect the domestic industry. A cheaper alternative like canola oil can become a threat for domestic mustard oil industry.
Mustard oil and DOC attracts 5% VAT in Rajasthan. Small time businessmen find themselves in financial constraints due to late refund of VAT. Sometimes, they have to wait for as long as 2 years for their refund. In order to provide a breather to the industry, the state government should levy 3% VAT on mustard, DOC and oil.
(Satyendra Kumar Shukla is also the Associate Vice President (Commercial) at Adani Wilmar, Jaipur)
(By Commoditiescontrol Bureau; +91-22-61391533)
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