A sharp rally in soyabean prices in the recent weeks on lower-than-expected crop size is seen affecting exports of soyameal as the Indian produce has yet again turned expensive in the global market.
Soyabean prices, which ruled below MSP levels of Rs. 2,700 a quintal in early November, have now moved up by a third since then on output concerns.
Spot prices of soyabean in Indore are currently hovering around Rs. 3,800 levels.
“There is definitely going to be an impact on exports looking at the current price trends. Shipments to India’s conventional soyameal markets have almost come to a standstill. We are only looking at premium markets, where non-GMO soyameal has a demand, for example in the Europe. Exports to Europe have been quite encouraging this year,” said Davish Jain, Chairman, Soyabean Processors Association of India (SOPA).
Soyameal shipments in April-December 2017 stood at 9.37 lakh tonnes (lt) — up from 4.46 lt in the corresponding period last year.
According to Jain, logistical bottlenecks made India lose an opportunity with the South-East Asian nations such as Bangladesh, where India exported about 4 lakh tonnes of soyameal last year. “Due to non-availability of rakes for Bangladesh, we couldn’t cater to the neighbouring market,” said Jain.
The Agriculture Ministry, in its first advance estimates, had pegged the soyabean output at 122.17 lt, lower than last year’s 137.94 lt. SOPA, on the other hand, estimated the crop size lower at 91 lt at the beginning of the season.
Jain said the output estimates may be revised post the second round of crop assessment due in February. SOPA has projected a carry over stock of about 13 lt from the previous season.
Amit Bharadwaj, CEO, Level A Commodities, says the squeeze in international supplies — mainly from Argentina — is also contributing to the rally apart from lower domestic crop.
Bharadwaj estimates the 2017-18 soyabean crop lower at around 78-80 lt, mainly on account of 15-20 per cent decline in yields and 10 per cent dip in acreage.
He further said that there was limited scope for correction in prices considering that the next crop is at least eight-nine months away.
According to Atul Chaturvedi, President, Solvent Extractors’ Association of India (SEA), some upside in the prices was expected around January due to several government measures which made farmers a reluctant sellers.
“The import duty on soft oils was hiked, similarly, for soyabean also the duty had gone up. Secondly, the sales window for Madhya Pradesh
government’s price difference scheme, Bhavantar Bhugtan, closed in December. Farmers aggressively sold under the scheme, but post withdrawal of scheme, they became reserved sellers,” said Chaturvedi.
But the sharp price rise immediately after the closure of the price difference scheme, hinted towards a speculative hand in the manipulation of prices.
A trade source indicated towards speculative forces getting involved for price manipulation, at a time, when about 70 per cent of the crop has already arrived in the market.
“Roughly about 70-75 per cent of the crop has arrived in the market. The domestic crushing is continuing but will get a set back due to higher prices. Hence, the benefit of higher prices is only limited to the stockists and speculators, neither farmers nor the consuming industry stand to benefit with price manipulation,” stated the source.
Source:- Thehindubusinessline.com
