Speculators in the futures market have distorted the soyabean cultivation and processing industries’ operations, according to the Soyabean Processors Association of India (SOPA). The association also contends that there could be a bumper crop this Kharif season if private weather agency Skymet’s predictions of normal to above-normal rainfall are correct.

“In the last couple of years, the aggressive participation of unscrupulous speculators in the futures market have distorted the industry’s operations…the current system of spot market polling needs to be streamlined and daily prices ought to be taken mostly from the processors…in order to display correct market prices,” said a SOPA statement released over the weekend.

The release came after an association meeting held in Indore on Saturday with officials from the National Commodities and Derivatives Exchange (NCDEX) and industry representatives.

“…Representatives from NCDEX assured that they will cooperate with the industry in every possible way and will take up the issues raised with higher authorities and also FMC to effectively curb speculative trade practices,” it added.

The association also put forward its demands at the event including the cessation of futures trading after 5 PM and at least 10 per cent of all soybean futures contracts being made to have compulsory delivery “in order to have futures market aligned to cash market” so that prices move in tandem.

The meeting also highlighted data discrepancies with members agreeing that the crop for the 2014-15 season was not less than 99 lakh tonnes although the sale of shares from farmers (50.43 per cent of the crop) and the level of crushing at 43.66 per cent till April-end was less compared to previous years.

“This has left a marketable surplus of 40.89 lakh tonnes of soyabean as on May 1 which would be more than sufficient to meet the domestic demand of soyabean meal for food and feed industry before the new crop arrives,” the statement added.

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