The mandi prices of soybean, a crucial variety of oilseed for Kharif, have increased by approximately Rs 500 per quintal since the government announced two weeks ago that the import levy on edible oil would be increased. As new supplies enter the market, soybean prices align with the minimum support price (MSP) for the upcoming season, which is fixed at Rs 4,892 per quintal for the 2024–25 season (July–June).
The cost of importing has increased due to the increase in import levies on refined and crude oils, forcing makers of edible oils to purchase more from domestic sources.
Recently, import taxes on refined edible oil increased to 35.75% from 13.75%, while charges on crude palm, soybean, and sunflower oils increased to 27.5% from 5.5%. This suggests that the price of both refined and crude edible oils will rise by a net of 22%, greatly increasing the cost of imports.
The agriculture ministry authorized the purchase of 2.92 million tonnes (MT) of soybean from farmers in Madhya Pradesh (1.36 MT), Maharashtra (1.3 MT), Karnataka (0.1 MT), and Telangana (0.05 MT) at MSP earlier this month when mandi prices were below the MSP as a result of low import taxes on edible oil.
This year, 12.51 million hectares (MH) of soybeans have been sown, 9% more than the previous year. The overall oilseed acreage this season has surpassed the five-year average of 12.29 MH, according to the agriculture ministry.
During the most recent Rabi season, government agencies bought 1.2 MT of mustard from farmers in the major producing states of Uttar Pradesh, Rajasthan, Haryana, and Madhya Pradesh, even though the crop year 2023–24 saw record production of 13.16 MT of mustard (July–June).
The farmers’ cooperative Nafed is presently offloading their mustard at the market. About 58% of India’s 24–25 million tonnes (MT) of edible oil usage is imported.
