[TRIDGE Trend Analysis: June W1] - India Seeks to Promote Domestic Production of Mustard Seed Oil

Mustard oil in India has seen a price surge of over 70% in 2021, owing to price hikes for most essential goods in the country. India is on the cusp of a “Yellow” revolution in the agricultural sector due to increased oilseed production, with mustard set to become the country’s top-grown oilseed. This increased production will also lead to a decline in mustard seed oil imports to India, as the country seeks to be more reliant on local production.

According to the India Ministry of Agriculture, the Indian government is keen on promoting mustard cultivation and focuses on increasing the acreage under oilseed crops. The Solvent Extractors’ Association of India (SEA) has mentioned that since the implementation of the Mustard Mission in 2019, mustard seed production showed a 49% increase. This makes mustard the favored choice to raise India’s oilseed production. In the post-Covid world, mustard is also viewed as the most preferred edible oil due to its number of health benefits, such as Omega-3, and higher content of monounsaturated fatty acids and polyunsaturated fats.

The blending of mustard seed oil banned

As a means of promoting the domestic production of mustard seeds and oil, the FSSAI implemented a regulation, in which the blending of mustard seed oil with any other edible oil in India has been banned effective as of June 8, 2021. Edible oil manufacturers or processors, who possess licenses to produce blended edible vegetable oil with mustard seed oil, had to sell their blended oil before the ban came into effect. According to FSSAI regulations, the blending of two edible oils remains permitted, given that the proportion by weight of edible vegetable oil utilized in the blending process is more than 20%.

Mustard seed oil production set to increase

India's mustard seed production is expected to rise. At the same time, imports of edible oil are set to decline due to the government's decision to prohibit the blending of mustard oil with any other edible cooking oil from June 8, 2021. As a result of the ban, an additional 5 lakh tonnes of mustard oil will be required to replace the other oils used during the blending purpose. The SEA has been working to limit India's dependence on edible oil imports by boosting domestic oilseed output. As a result, SEA has launched the Mustard Mission to raise the Indian mustard production to 20 million tonnes by 2025.

India plans to increase its mustard seed production through improved farm practices, efficient technology deployment, quality seeds, and sound input management. Mustard production in the country for MY 2020/21, which began in October 2020, is set to exceed 9 million tonnes, a record high comfortably. Record high prices of mustard oil prices in the country are likely to incentivize growers to produce mustard aggressively in the coming years. This will help India achieve the SEA target of 20 million tonnes in the next five years. If this target is reached, it will make mustard India’s leading oilseed for years to come.

Sources:

• Deccan Herald. “India's mustard seeds production likely to rise, import of edible oil may reduce.”
  
• The Indian Express. “Impact of covid on essential items: Cost of mustard oil rose by 70-80% in a year.”
  
• FNB News. “India on the cusp of Yellow revolution led by mustard, webinar told.”