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Soybean industry in Madhya Pradesh is facing tough time this year amid low soymeal export demand and high taxation by the state government, feel industry players.
Madhya Pradesh accounts for more than 70 per cent of the country's soybean production and the state houses most major crushers of the country.
"Soymeal export demand is low as Indian prices are around $50-55 a tonne higher than its competitors in the international market," said a major soymeal broker in Indore.
Also, bumper crop in Brazil, Argentina and the United States of America (USA) have diverted buyers to these countries due to price advantage, said traders.
According to exporters, soymeal exports shortfall this year is likely to be around 60 per cent compared with the last Oil Year (October - September).
Recently, the Madhya Pradesh government imposed 1 per cent tax on soymeal or de-oiled cake in the state Budget.
"Neighbouring state like Maharashtra has no tax on soymeal or de-oiled cake and hence, the tax imposed will make units in MP uncompetitive. It will ultimately hurt the interest of lakhs of farmers who depend on soybean crop in Kharif for their economic well-being," said Davish Jain, chairman, Soybean Processors Association of India in a statement.
Most industry players feel the taxation and demand scenario is hurting the industry in the state and its effects will continue in the coming years too.
"We expected exemption from market tax or entry tax in the state budget but the state government has levied 1 per cent tax on soymeal/ deoiled cake," said Girish Matlani, managing director, Sonic Biochem Extraction Limited.
On soymeal export potential in the coming days, Matlani said, "We seriously see low potential in the coming days and years until the production goes up substantially in the growing regions. Only higher production can make Indian prices competitive in the international markets."
