Soybean prices up 13.5%

Spot soybean price perked up by 13.5 per cent in the last one month due to the estimated lower availability of soy seed this year.

In the spot Indore market, soybean closed at Rs 1,364 per quintal on Wednesday as compared to Rs 1200 per quintal last month.

Soymeal too surged in spot market by 11 per cent or Rs 875 in Madhya Pradesh with the price touched the new peak of Rs 9225 per quintal on Wednesday from Rs 8350 per quintal last month. Witnessing a leap in the raw material, soyoil prices surged by Rs 25 to Rs 425 per 10 kg excluding VAT in the physical market.

Soybean futures for the near month contract jumped 9 per cent on NCDEX to Rs 1362.5 per quintal from Rs 1240 per quintal last month. Despite paucity of trade on NCDEX, soymeal futures for the near month contract surged by 9 per cent to Rs 9214 per quintal from Rs 8460 per quintal one month before.

Refined soyoil jumped marginally by Rs 25 for near month to close at Rs 445 per 10 kgs as compared to Rs 419 per 10 kgs one month before. Despite soy seed output estimated to remain rangebound at around 7.2 million tonne, the availability is anticipated to remain lower due to less carry over stocks.

"Last year the total carry over stocks accrued to 7-8 lakh tonne as compared to 2 lakh tonne this year. The speculators and stockists anticipate lower availability this year, said Rajesh Agrawal, chairman, Soyabean Processors Association of India (Sopa). Today, stockists and speculators are making their position fearing the further spurt in prices. Mills are witnessing normal supply with about 25 per cent of soy seed has been supplied for crushing so far this season.The Mandis in Madhya Pradesh are witnessing an arrival of about 50,000 - 60,000 bags (100 kgs each), today. Soybean crushing season begins in October and continues till December. Then crushing activities decline gradually between December and March which follows six months lean period between April and September.

Soybean prices are going up in the international market with prices jumped by $23 to $223 in the last one month. Fundamentals are price supportive. Hence, the price in the near term may remain higher. But, Agarwal suspects the continuation of this trend.

"Disparity between soy seed and meal, oil can not sustain for long as it only boosts dissatisfaction. Therefore, for sustainable equilibrium either seed price should go up substancially or meal or oil prices should decline dramatically," said Agarwal.

Taxes are affecting out trade very badly as same is not levied in neighbouring states including Maharashtra and Gujarat.

The government has levied 4 per cent VAT and 2 per cent central excise which the traders want to be waived off immediately for smooth functioning. Otherwise, it would add additional plight to the processors, a trader said.