The Solvent Extractors’ Association of India (SEA) has appealed to the government for support to enhance rapeseed meal exports and maintain the Minimum Support Price (MSP) for rapeseed and mustard, in order to safeguard the interests of farmers.
In a memorandum addressed to various Union ministers, SEA President Sanjeev Asthana highlighted that domestic mustard seed prices are currently hovering around INR 6,200-6,300 per quintal, without additional support for rapeseed meal exports. He warned that seed prices could soon fall below the MSP of INR 5,950 per quintal, which could undermine government efforts to maintain market prices above the MSP and disrupt the ongoing mustard sowing season.
New Challenges for the Industry
India has traditionally been a key exporter of rapeseed meal, an important ingredient in animal feed, and exported nearly 2.2 million tonne (MT) of rapeseed meal in the 2023-24 fiscal year, helping farmers secure better prices for their produce. However, Asthana noted that rapeseed meal exports have dropped from 1.51 MT between April and October 2023-24 to just 1.18 MT in the same period this year.
He attributed the decline to higher prices in the international market, with rapeseed meal (ex-Hamburg) currently priced at USD 283 per tonne, which is USD 40-50 per tonne cheaper than Indian prices. A global glut of soybean meal, driven by an increase in global soybean production, is also contributing to this issue. Increased demand for soybean oil has led to greater crushing activities, resulting in an oversupply of soybean meal, which is exerting downward pressure on the prices of all oil meals, including rapeseed meal.
Disposal of Surplus Rapeseed Meal
While favourable weather conditions, including a good monsoon and strong reservoir water levels, have encouraged farmers to expand rapeseed and mustard planting areas, Asthana pointed out that despite the expected bumper crop of over 13 MT, the disposal of rapeseed meal could become a significant issue.
Furthermore, the increasing availability of maize DDGS (Dried Distillers Grains with Solubles) at very low prices, due to higher ethanol production, and the unusually low prices of rice bran de-oiled meal, caused by the export ban on rice bran meal, are displacing domestic demand for rapeseed meal in cattle and poultry feed formulations.
Urgent Government Action Needed
To maintain market stability, SEA estimates that at least 2.5 MT of rapeseed meal must be exported this year. However, with exports already down by 22% in the first seven months of the 2024-25 fiscal year, urgent government intervention is required.
In light of the challenging price scenario for mustard meal, SEA has requested the government to take action to address the glut of maize DDGS and de-oiled rice bran, including allowing their export. They have also called for an export incentive of at least 15% for rapeseed meal through higher Remission of Duties and Taxes on Exported Products (RoDTEP) rates, freight subsidies, and interest rate subventions to make exports more competitive.
“This will help ensure that domestic prices remain above the MSP for rapeseed and mustard, and improve crushing parity to increase the availability of edible oils,” Asthana concluded in the memorandum.
Source: The Business Line
