With farmers responding positively to a marginal increase in prices, soybean arrivals have doubled this fortnight. Small- and medium-scale farmers have started to offload their inventories while large-scale ones are holding their stocks anticipating a further spurt in prices.
At the mandis in Indore, a total arrival of 700 tonnes was seen today. According to Rajesh Agarwal, co-ordinator of the Indore-based Soybean Processors’ Association (Sopa), total arrivals in Madhya Pradesh were recorded at 100,000 bags of 100 kg each as compared to 50,000 bags a fortnight ago.
Crushing units had reduced their capacity utilisation to 40 per cent because of lower raw material availability and squeezing margins between the rising prices of the raw material, soybean, and the falling realisation for the finished product, soy oil.
Soybean prices have risen 5 per cent or Rs 110 to Rs 2,460 a quintal as compared to Rs 2,350 a quintal a fortnight ago.
“Earlier, farmers were skeptical to sell beans in the hope of even higher prices. But now, they are coming aggressively to release their holding to take the price benefit,” said Agarwal.
Meanwhile, the Central Organisation for Oil Industry & Trade (COOIT), the apex body for edible oil and oilseed trade in the country, has revised soybean output estimates for 2008-09 to 8.9 million tonnes as compared to 9.46 million tonnes last year. Sopa continues to estimate higher output between 9 and 10.5 million tonnes in 2008-09 as compared to 9.6 million tonnes last year.
“Prices in the domestic market were supported by the spurt in the international market, especially because of the recent cold weather in the US which has threatened a delay in planting. Also, the United States Department of Agriculture (USDA) cut 20 million bushels off its 2008-09 US soy ending stocks figure at 165 million bushels, reflecting a 25-million increase in exports. If its forecast realised, it would be the tightest domestic bean supply in five years,” an analyst said.
The USDA also trimmed its forecast of Argentina’s soy crop for this year to 39 million tonnes, down from the previous 43 million. A decline in global soy supplies comes at time when importers, led by China, have stepped up imports. China bought 3.86 million tonnes of soybeans in March, a rise of 66.6 per cent from the same period last year.
This is a testing time for Indian farmers as they can cash in on the higher prices and exit from the extra expenses of stock holding amid uncertainty of further price rise. However, another spurt in prices may fetch higher realisation of existing wealth, the analyst added.
Soybean auction prices for mandi delivery in Indore mandis surged marginally by Rs 10 to trade between Rs 2,460 and Rs 2,480 a quintal while traders remained upbeat between Rs 2,465 and Rs 2,485 a quintal.
Following bean, meal prices for Mumbai delivery also jumped Rs 20 on Monday to trade between Rs 2310 - 2315 per quintal while the same for Kakinada delivery also rose similarly to move between Rs 2305 - 2310 per quintal.
