On Sunday, the prices of all oilseeds and edible oils in the country’s major markets declined. This was driven by a drop in cottonseed prices in futures trading due to the arrival of the cotton crop, which impacted the business sentiment of all other oilseeds. During this period, the prices of mustard, groundnut, soybean oilseeds, crude palm oil (CPO), palm olein oil, and cottonseed oil recorded losses.
There was a significant decline in the Malaysia and Chicago exchanges, with Chicago experiencing a sharp drop last night. Market sources reported a collapse in global markets. Additionally, even before the arrival of cottonseed in the markets, the price of cottonseed cake started weakening in future trade. Two months before the arrival, the cost of cottonseed cake stood at around ₹3,800 per quintal, which has now fallen to ₹2,620 per quintal (December contract).
Why is the Price of Cottonseed Cake Falling?
A leading cotton organization is purchasing cotton at the Minimum Support Price (MSP). However, instead of stocking the cottonseed, the organization is selling it at prices much lower than its cost. This is contributing to the falling price of cottonseed cake.
Cottonseed cake is a vital commodity in India, with annual consumption estimated at around 1.3 crore tonnes. Its falling price is now influencing the prices of other oilseeds. Additionally, there is not enough stock to match the number of deals made in the futures market. A certain percentage of fixed deals should be backed by actual stock, but this is not being followed.
Reduced Cotton Production
According to data released by the Cotton Association of India (CAI), cotton production has decreased this year. Despite this reduction, the steep fall in cottonseed cake futures prices is surprising. Whatever the intentions may be, this situation poses a threat to India’s goal of self-reliance in oilseed production.
Calls for Action Against Futures Trading
Market experts suggest that the fall in cottonseed cake prices should be questioned, especially by those advocating futures trading in oilseeds. Keeping oilseeds out of futures trading may help protect farmers from potential exploitation in the future.
The Shift in Price Dynamics
About a decade ago, cottonseed cake used to be priced almost twice as high as maize. Back then, maize cost ₹10-12 per kg, while cottonseed cake was priced at ₹23-24 per kg. Today, cottonseed cake costs ₹26 per kg, but maize is now priced at ₹27-28 per kg. This shift in price dynamics could be a major reason behind the declining cotton production in the country.
Edible Oil Prices Today
| Product | Price Range (₹/Quintal) |
|---|---|
| Mustard Oilseeds | 6,450 – 6,500 |
| Peanuts | 5,900 – 6,225 |
| Peanuts (Mill Delivery, Gujarat) Oil | 14,250 |
| Peanuts Refined Oil | 2,150 – 2,450 (per tin) |
| Mustard Oil Dadri | 13,450 |
| Mustard Pakki Ghani | 2,250 – 2,350 (per tin) |
| Mustard Kachi Ghani | 2,250 – 2,375 (per tin) |
| Sesame Oil (Mill Delivery) | 18,900 – 21,000 |
| Soybean Oil (Mill Delivery, Delhi) | 13,000 |
| Soybean Oil (Mill Delivery, Indore) | 12,750 |
| Soybean Oil Degum (Kandla) | 9,025 |
| CPO (Crude Palm Oil, Ex-Kandla) | 12,800 |
| Binola (Mill Delivery, Haryana) | 11,600 |
| Palmolein RBD (Delhi) | 14,050 |
| Palmolein (Ex-Kandla, Without GST) | 13,000 |
| Soybean Grain | 4,265 – 4,315 |
| Soybean Loose | 3,965 – 4,065 |
| Maize Cake (Sariska) | 4,100 |
Disclaimer:
The prices are indicative and may vary due to market fluctuations. Verify with local markets before making any decisions.