Weekly Review-Soybean

21-Dec-2024 07:03 PM

Soybean prices soften despite record government purchase

Market Trends: Despite a record government purchase of 5.62 lakh tonnes of soybean worth Rs 2700 crore from 2,42,461 farmers till December 11, 2024, the market prices of soybean have continued to soften. This government purchase was made at a minimum support price (MSP) of Rs 4892 per quintal. However, during the week of December 14 to 20, the plant delivery price of soybean in top-producing states like Madhya Pradesh, Maharashtra, and Rajasthan declined by Rs 50 to Rs 100 per quintal. The price has fallen to a range of Rs 4200-4300 per quintal, resulting in significant losses for farmers.

Refined Soybean Oil Prices: The trend of softening was also seen in the prices of soy refined oil, which fell by Rs 20 to Rs 40 per 10 kg during the week under review. This decline in oil prices has made it difficult for crushers and processors to purchase soybean from farmers at higher prices.

Imports Impact: The import of soybean oil from abroad has added further pressure on domestic prices. The price of soybean oil dropped by Rs 45 in Kota, Rs 25 in Mumbai, Rs 60 in Kandla, and Rs 55 per 10 kg in Haldia during the week. Even though the import duty on edible oils has increased, it has not significantly affected the price trends.

Arrivals and Crushing Demand: At the national level, the average daily arrival of soybean in markets stands at 3.50 to 4.50 lakh bags (100 kg each). However, demand from crushing and processing units remains weak, resulting in a surplus that the government must absorb through purchases.

Soya DOC (De-oiled Cake) Demand: On a positive note, there is strong demand for soya de-oiled cake (DOC) at lower prices. During the week, the price of soya DOC increased by Rs 1000 to Rs 2000 per tonne, providing some relief to the sector.

Outlook: The soybean market faces challenges with softening prices, weak crushing demand, and the pressure from imported soybean oil. With large quantities still being purchased by the government, the sector is looking for ways to stabilize prices and provide better returns for farmers. The demand for soya DOC offers a hopeful sign for the industry.