Amidst expectation of a bumper harvest, higher opening stocks and softening trend in global edible oil prices, the prices of soyabean and the soyameal are on a downward spiral in recent weeks.
When compared with the average prices in September last year, the soyabean prices are about 37 per cent lower, while that of the meal have come down by 45 per cent.
Trade sources expect the prices to come down further as the new crop hits the market sometime next month. Lack of demand from crushing units is also aiding the trend.
Rahul Chauhan, Director, IGrain India, attributes the fall in soyabean prices to the decline in international crude palm oil prices and the inflow of duty free crude soyabean oil imports under tariff rate quota. “Also with Argentina creating a special exchange rate for its soyabean producers to incentivise exports, the availability is seen increasing in the world market, which should influence the soya complex here,” Chauhan said.
According to the Agriculture Ministry, soyabean has been planted on 120.37 lakh hectares, marginally lower than the previous year’s 120.63 lakh ha.
“The domestic soyabean crop looks good due to good rains and the yields are likely to be good this year. Overall, the soyabean complex is likely to remain bearish for the next couple of months till the demand picks up,” Chauhan added.
Tarun Satsangi, AGM – Commodity Research at Origo E-Mandi, said: “We are likely to have a bumper crop this year”. Also, there is a huge unsold inventory of the oilseed. “Those who are having soyabean inventories are not going to release them at these depressed prices. We are going to have a higher opening stock, which is already hitting the market sentiment,” Satsangi said.
According to SOPA, the carry forward inventory for the new oil year will be 27.22 lakh tonnes.
Also, the mustard seed prices are falling due to the falling prices of soyabean and palm oil. Mustard seed prices have come down to around ₹6,100 per quintal from about ₹7,400 registered in the recent past. After two months, the planting of mustard is going to start. “There is panic in the market amidst low crushing and no demand,” he said.
Satsangi said the soyabean prices may come down further to touch ₹4,500-4,800 levels during the peak arrival period. “We could see some aggressive buying by the millers and processors, but this year prices will remain depressed. Even if it goes up, it will be for a short period,” he said.