Concessions on edible oil imports curb inflation

- Commodity Current: Jayavadan Gandhi

It is said that even a small sneeze in the United States affects markets around the world. Last week saw a sell-off in bullion as well as metal and currency commodity markets on signs that the US would raise interest rates twice by 203. On the other hand, trade in the commodity market remained weak as India as well as China took stringent measures to curb rising inflation. Due to the above global factors, gold prices have also declined to a low of Rs 200 per 10 grams and silver prices have been declining to around Rs 30,200 per kg. However, leading analysts do not see the gold-silver market as currently in a slump. But considering it a buying opportunity. Gold-silver is showing signs of an upcoming long-term rally. Due to the strength of the dollar, selling pressure on various commodities such as copper, aluminum, zinc, as well as deficit oils was on the rise. In addition to the government's crackdown on inflation, the market for various oilseeds is slowly collapsing as concessions are being made on edible oil imports. Palm oil prices have fallen by 15 per cent in the last one month. The market price of sunflower has come down by 15 per cent to around Rs 15 per kg. Soybean oil is also down 12 per cent at 12. Rayda oil has declined by 10 per cent, groundnut seagull oil and vegetable oil by eight per cent. Traders have also complained that the pulses market has softened due to the greenery of import of pulses from abroad to control the rising prices of pulses parallel to edible oils. The government has softened the market by importing 20,000 tonnes of tuver dal from Malawi, 2.5 lakh tonnes of adad from Myanmar and 100,000 tonnes of tuver dal.

The central government and various state governments are also conducting various exercises to become self-sufficient in pulses and oilseeds. The central government is supplying edible oilseed seed kits to farmers. Recently, the Haryana government has announced an incentive of Rs 4,000 per acre to encourage farmers to grow pulses and oilseeds. In Haryana, instead of cultivating grains like wheat, cultivation like beans and oils is being encouraged to get good returns.

Due to high oilseed prices, the cultivation of edible oils like soybean has increased in the country and abroad and soybean production is expected to be bumper this year. With soybean prices rising by 20 per cent this year over last year, soybean has become a special attraction for farmers. Soybean cultivation is expected to increase by about ten per cent this year. Madhya Pradesh and Maharashtra have higher soybean production. Last year, soybean production was around 105 lakh tonnes in about 120 lakh hectares. The government has increased the support price of soybean to Rs 20 per quintal, making it a profitable crop for farmers.

Apart from this, at the beginning of the kharif season, due to sowable rains across the country as well as in Gujarat, the pace of farming activities has increased at the village level. As a result, the state's agricultural markets have seen a significant decline in crop income, leading to sluggishness in the spot markets.

In February and March of this year, the revenue in the agricultural markets was good. But markets were closed in April, largely due to a lockdown caused by Corona. The agricultural season usually ends by the end of May. So, by the end of Diwali, the state's agricultural markets are expected to have almost limited revenues, leading to a recession. The cumin market at Uza Marketyard has also declined significantly. With the fall in cumin futures and the decline in the price of malo, the prices of cumin have come down by Rs 200 to Rs 500 to Rs 200 to Rs 300. The prices of sesame are also on the decline due to limited trade against an average income of Rs 5,000 to Rs 6,000 a sack.