Food regulator bans blending of mustard oil with other edible oils

Financial Express - Business News, Stock Market News

The size of the mustard oil industry is around Rs 40,000 crore, at current prices and projected output of the oilseed.

The food standard regulator, FSSAI, has banned blending of any kind of edible oil with mustard oil from June 8. Such a ban was earlier imposed from October 1 last year, only to be revoked in less than three months.

As the government has been stressing on ‘Atmanirbhar’ in oilseeds production, a consistent policy may help it achieve this and cut annual edible oil import bill of Rs 75,000 crore, industry sources said.

In a notification issued earlier this month, the Food Safety and Standards Authority of India (FSSAI) has inserted a Clause 11 under “sale of certain admixtures prohibited” that says “Any multi source edible vegetable oil containing Mustard Oil manufactured on or after June 8, 2021.” According to the FSSAI regulations, blending of two edible oils is permitted, provided the proportion by weight of any edible vegetable oil used in the blending process is not less than 20%.

Sources in the edible oil industry said blended oils were being “unscrupulously” passed on to unsuspecting consumers as mustard oil. There was a demand even from genuine players in the edible oil industry to stop the practice of blending in mustard oil so that demand is not diluted and farmers are also paid remunerative prices to motivate them for raising production. The size of the mustard oil industry is around Rs 40,000 crore, at current prices and projected output of the oilseed.

According to the second advance estimates released by the agriculture ministry in February, there may be a record production of mustard seen at 10.43 million tonne in 2020-21 crop year (July-June), up by over 14% from the previous year. However, the Central Organization for Oil Industry and Trade (COOIT) has estimated 8.95 million tonne of mustard seed output, up by more than 19% from last year. Official estimates suggested mustard production was 9.12 million tonne, while COOIT pegged it at 7.5 million tonne during 2019-20.

Fortunately for farmers, the mustard prices have been robust this year while 77% of the crop area has been harvested as of March 19.

The sowing was also at record 6.85 million hectare this year, against a five-year average of 5.9 million hectare. The average mandi price of mustard was Rs 5,121/quintal in India’s top producing state Rajasthan during March, up by more than 10% from its MSP of Rs 4,650. The all-India average retail price of mustard oil, too, has increased by around 19% to Rs 152/litre in the past six months, consumer affairs ministry data revealed.

“We have been advocating the ban on blending for quite some time. Mustard oil is one of the healthy edible oils and the ban on blending will encourage more and more people towards mustard oil. The move will also help farmers in getting better price for their produce and help in reducing reliance on imports for meeting our edible oil requirements,” said Suresh Nagpal, chairman of COOIT.

The agriculture ministry had proposed a five-year plan of edible oil mission at an estimated expenditure of Rs 19,000 crore to reduce import of edible oils such as palm and soybean oil. However, no such announcement was made during the FY22 Budget, and there may be a decision around August 15, sources said.

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