Soyabean prices have increased to record levels in the domestic market. This follows a bullish trend in the global market, poor arrivals and demand for oilmeal, especially from Iran.
On Saturday, soyabean prices in the spot market at Indore ruled at Rs 2,811 a quintal, up Rs 2,550 at the beginning of the year. Prices were ruling at Rs 2,347 during the same a year ago.
In the futures market, March contracts ended at Rs 2,799 a quintal on Saturday, while April contracts ended at Rs 2,856 and May at Rs 2,892.
In the global market, soyabean have zoomed to near six-month high of $13.3775 a bushel or about Rs 2,500 a quintal on the Chicago Board of Trade.
“Soyabean has gained because of bullish foreign markets. Funds and speculators have gone long as dry weather in Brazil and Argentina is feared to affect crop in South America,” said Mr Rajesh Agrawal, spokesperson of the Soyabean Processors Association of India.
During the weekend, the US Department of Agriculture cut Brazil soyabean output estimate to 68.50 million tonnes (mt) from February's forecast of 70 mt. The estimate of Argentine soyabean crop was seen lower at 46.5 mt against a projection of 48 mt made in February.
“Projections of lower rapeseed/mustard are also driving up soyabean prices,” said Mr Rajesh Agrawal. A survey carried out by the Solvent Extractors Association of India has projected this year's rapeseed/mustard output at 6.27 mt against 6.85 mt a year ago.
Iranian demand
“Lower rapeseed/mustard is one reason. But we think demand for soyameal from Iran is pushing up the bean market,” said Mr B.V. Mehta, Executive Director of Solvent Extractors Association of India. “Iran has become a big market for our soyameal. Even UAE, Turkey and Egypt are buying considerable amount,” said Mr Mehta.
According to Solvent Extractors Association of India's export data, Iran imported 1.9 lakh tonnes (lt) of oilmeals during April-February period of the current fiscal against 1.6 lt during the same period a year ago. Egypt's import of Indian oilmeals trebled to 1.22 lt against 31,212 tonnes. UAE's imports was lower at 70,314 tonnes against 80,966 tonnes a year ago.
Currently, soyameal is quoted at Rs 20,500-20,700 a tonne free-on-wheels Kandla against Rs 18,400-18,500 a year ago.
“Last year, we had exported four lakh tonnes soyameal to the entire Gulf region. This year, we may exceed it,” Mr Mehta said.
Rising oilmeal exports to the Gulf region comes at a time when China has suspended imports of Indian rapemeal from January 1. China imported over five lakh tonnes of oilmeal, mainly rapemeal, last year.
Mr Sunil Mukhati, a farmer near Indore, said that farmers with large holdings had held back soyabean and are now reaping benefits of it. “Big farmers who stored their produce for selling later are getting good price now,” he said.
Asked if higher prices were affecting solvent extractors, Mr Agrawal said that on a day-today basis there was disparity. “But large players are benefiting. They have been buying at various price points,” he said.
“One more reason for the rally in soyabean could be that the crop is lower than projected,” said Mr Mehta.
Production of soyabean, a kharif crop, has been estimated at 12 million tonnes this year by the Ministry of Agriculture against 12.7 million tonnes last year.