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Soybean prices gained as much as 8-10 per cent in spot markets in a week on declining supplies and good demand, said traders.
"Markets are witnessing a mix of both inferior and good quality soybean supplies at present and prices have gained around Rs 250-300 in all categories," said B L Saini, a soybean trader in Indore mandi.
Due to heavy and incessant rains in kharif 2013 a significant amount of soybean crop got damaged and local mandis are witnessing at least three types of supplies, that is, damaged and spotted, average quality and good grading quality, said traders.
Currently, damaged and spotted soybean prices are Rs 2,100-2,200 per 100 kg compared with Rs 1,700-2,000 per 100 kg a week ago and good quality prices are Rs 3,900-4,000 per 100 kg compared with Rs 3,600-3,800 a week ago, added Saini.
Plant delivery prices ranged between Rs 3,700-3,850 per 100 kg compared with Rs 3,600-3,625 a week ago.
Good soy product demand and declining supplies were seen as the major reasons behind the price gains, said traders.
Currently, soymeal is witnessing moderate demand and soyoil is getting good demand due to festivals, said traders.
Farmers delivered around 275,000 bags of 100 kg to Madhya Pradesh on Wednesday compared with 400,000 bags a week ago, said traders.
Traders feel the arrivals are down as farmers are probably getting busy in fields due to rabi sowing and many are not bringing their produce to the markets in expectations of better prices.
"Farmers have sold not more than 30 per cent of their produce in my village in October as we are awaiting better prices," said Shekhar Thakur from Bhorawsa village near Indore.
Also, supplies may be lower in the coming days due to Diwali holidays in many major mandis from Friday, said traders.
Many traders feel lowering of production figures by trade bodies and experts is also giving way to bullish sentiment in the markets.
