The Mustard Oil Producers Association of India (MOPA) has asked the Finance Minister Nirmala Sitharaman to remove the stock limit on oilseeds and allow futures trading in the commodity.
According to MOPA, the farmers have toiled hard to increase the production of oilseeds following which the import of edible oil came down to 135 lakh tonnes from 150 lakh tonnes. However, in the last four months, edible oil prices have fallen by 40-45 per cent and are now almost at pre-COVID level. This has pulled down the local oilseeds prices.
Soyabean seeds, which were selling at around Rs 9,500 a quintal last year, is now selling at Rs 4,500 a quintal. Similarly, mustard seed is selling at Rs 6,000 a quintal vis-a-vis Rs 8,500 a quintal last year, the association said in a statement.
According to the association, the government should immediately remove the stock limit on oilseeds and permit futures trading in mustard, soyabean, soya oil and crude palm oil. This is because the stock limits on edible oil and oilseeds are adding to the woes of the edible oils sector. Several factories have closed down in the country, resulting in job losses, it added.
Stock limit on edible oil and oilseeds was imposed in February for couple of months and later, it was extended till December 2022. MOPA also pointed out that due to the ban on the futures trading; the industry has not been able to manage risks properly, which has resulted in losses.
Furthermore, in the absence of the future trading, farmers are also in dilemma about the prices their produce will fetch and the scenario is similar with customers about the prices they need to pay, it said. “Globally, futures trading continues even during the most adverse of situations and is never banned as it works as a bridge between farmers and customers,” MOPA said.