MUMBAI, 24 August 2025: The government, which has experienced the sudden rise in commodity prices for the last 10 years, is now remembering the proverb "a proactive man is always happy". Five years ago, when mustard prices crossed the level of INR 8800 per quintal during the festive season, the government had to go through a difficult time.
Even now, when mustard prices have reached INR 7600 per quintal in the last one month, the government has woken up and has started efforts to increase the supply before there is a shortage of mustard in the country. Last week, when mustard prices reached their highest level in three and a half years, India imported 6000 tonnes of canola oil, the first time in five years.
The shipment of this oil will leave from the UAE by the end of August. Since these reports came, there has been hope that edible oil prices will stabilize in the market. The price of mustard in the Rajasthan spot markets had fallen to INR 7429. It should be remembered that since February, mustard prices have increased by 34 percent.
In India, mustard is cultivated in the Rabi season. As a result, the new mustard crop will start arriving in March 2026. Till then, the government is trying to control the supply and price of mustard in the market. However, millers and importers have become cautious after receiving indications that the government is taking steps to control the price. Rajasthan millers have reduced the purchase of mustard. Those who buy it are buying it at a lower price of INR 75 per quintal.
India's mustard DOC exports in July-2025 are reported to have increased by 13.62 percent compared to June 2025. India may benefit as China has imposed 75 percent anti-dumping duty on Canada. As India, China, Russia and Brazil have now decided to trade in rupees by making an agreement for business, the dominance of the US dollar will decrease. Which will directly benefit India's export trade. Now when China will need DOC or mustard, the first purchase is likely to be from India.
The domestic market is currently witnessing a continuous festive season till November. As mustard oil is the preferred cooking oil in East and North India, the government will be keeping a close eye on the price of mustard oil. Also, with the assembly elections coming up in Bihar, special care will be taken to ensure that the price of oil does not become an election issue.
Statistics show that farmers have reduced the cultivation of oilseeds in the current Kharif season, which has also affected the prices. In addition, the domestic MSP of edible oilseeds is high and the prices are low in the global markets, so traders are attracted to imports. The government will have to make a special policy to control imports. The way in which vegetable oil producers now have to give monthly accounts to the government is likely to cause problems to small millers. Only by retaining these millers, India can increase oil production.
There is currently talk in the market that the government may reduce the import duty by another 20 percent to control the price of mustard oil. Apart from this, everyone is also watching how the canola oil coming from the Gulf countries will actually affect the market after it reaches the Kandla port in India. Since both these issues are highly sensitive for the mustard oil business, people are currently inclined to wait and see.
By Kalpesh Sheth is an commodities expert with years of experience.
Image credit: Business Standard