Soy to remain high despite bumper output

A 30 per cent jump in soyabean production is unlikely to result in any substantial drop in prices of the commodity that is ruling at about Rs 1,675 a quintal.

"The international market is bullish. The domestic prices of soyabean are not expected to dip substantially until prices of end-products (oil and meal) slide," Soyabean Processors Association (SOPA) coordinator Rajesh Agarwal said.

He said the prices have gone up to Rs 1,675-1,680 a quintal in the spot market from Rs 1,630 level last week.

"The firmness in global prices of degummed soya oil, which influence the domestic rates of refined soya oil, would ensure farmers a better realisation for oilseed despite increase in production and (cultivation) area," he said.

He said the new crop began at Rs 1,550 level this year when soyabean came to the wholesale markets in September last week and went to a high of Rs 1,700 a quintal in the second half of October.

According to SOPA estimates, soyabean production may rise to 94.73 lakh tonnes in kharif 2007 from 71.49 lakh tonnes last season due to increase of around 15 per cent each in yield and acreage.

Yield of the crop is expected to grow by 15.42 per cent to 1.07 tonne a hectare compared with 0.92 tonne last year, while area under production has gone up by 14.68 per cent to 88.49 lakh hectare from 77.16 lakh hectare.

Cost and freight for degummed soyabean oil in Mumbai has surged to $1,040 (Rs 40,918) a tonne from $595 a tonne in November 2006.

On the other hand, domestic prices of refined soya oil have gone up to Rs 48,900 a tonne from Rs 40,700 a tonne in the review period.