There is little chance of a sharp rise in soybean prices for the next few months.
10-Jun-2024 11:56 AM
Mumbai. Due to many reasons, there is no possibility of a sharp rise in the domestic market price of soybean for the next few months.
Although the off-season of soybean supply has started and soon the sowing for its new crop is also going to start in full swing, but on the other hand there are some factors which can prevent the rise in its prices.
There are signs of weakening of demand for soybean oil and soymeal in the domestic sector. There is a report of softness from the global market.
There is a huge import of cheap soybean oil and the quality of soybean with outstanding stock is getting weak. As a result, the price of soybean has come down.
For the 2023-24 season, the minimum support price of soybean has been fixed at Rs 4600 per quintal, while the price in loose is running much below this.
According to analysts, there may be some increase in the price of soybean after mid-November. In Madhya Pradesh's benchmark Indore Mandi, soybean prices fell 2.6 per cent on a weekly basis and 1.1 per cent on a monthly basis to around Rs 4700 per quintal. Madhya Pradesh is the largest producer of soybean and the arrivals there have also started decreasing.
Soybean crop, a major oilseed of the Kharif season, was damaged by adverse weather last year. Drought in Madhya Pradesh,
Maharashtra and Rajasthan - all three top producing states - hindered the progress of soybean crop. According to the Union Food Ministry, during the 2023-24 season, the total domestic production of oilseed crops declined by 18 lakh tonnes or 4.3 per cent from 414 lakh tonnes to 396 lakh tonnes as compared to the 2022-23 season.
Under this, especially soybean production fell from 150 lakh tonnes to 131 lakh tonnes. Usually during the monsoon season, domestic demand for soybean weakens and its arrival in the mandis is also less.
Huge quantities of soybean oil are being imported into India regularly. During the last five years, India has been producing an average of 17 lakh tonnes of soybean oil annually while its annual average import was recorded at 35 lakh tonnes.
This means that only one-third (33 percent) of the total domestic demand and consumption of soybean oil is met from indigenous sources while imports from abroad meet the remaining 67 percent or two-thirds of the consumption.
As a result, the fluctuations in the global market largely affect the price of soybean oil in the domestic market.