Soyabean prices, which were in bearish mode till October end, have now reversed the trend on strong demand from crushing units, traders and stockists. The government’s recent move to ease the stock limit curbs on edible oils and oilseeds exempting the big chain retailers and wholesalers from the stock control order has been the trigger for the price reversal.
According to Agmarknet data, the modal price (the rate at which most trades take place) of soyabean in Indore which ruled around ₹3,500 per quintal in mid-October is hovering over ₹5,400 per quintal in the first week of November. Similarly, the modal price across various mandis in Madhya Pradesh hovered between ₹5,105 and ₹5,820 on Monday.
“The easing of storage control order has brought back the traders to the markets,” said D N Pathak, Executive Director, Soyabean Oil Processors Association (SOPA), the apex trade body. “The overall situation remains the same as the Indian meal continues to be uncompetitive in the international market”.
Mills’ aggressive buying
Tarun Satsangi, AGM – Commodity Research at Origo Commodities India Pvt Ltd, said soyabean prices have perked up after the removal of stock limit and on higher bulk demand. There is a possibility of further upside in the short term. The good quality soyabean is trading at ₹5,700 in the Indore mandi and trading higher at ₹5,900 levels in other mandis such as Kota. “Over the past one week, prices have moved up by ₹600 per quintal in Indore and the increase is about ₹800 in the past fortnight,” he said.
Satsangi said there is aggressive buying from millers, crushers and big buyers, who are directly coming to the mandis to buy the crop in Madhya Pradesh. Arrivals have been slower due to extended rains. “The mismatch in arrivals and demand is also pushing up prices. The aggressive buying will continue in November and December. Prices may turn stable in December due to the higher carryover stocks and also due to some clarity on the mustard crop by January,” Satsangi said. He expects the market arrivals in November to be about 10 lakh tonnes and around 15 lakh tonnes in December.
Tight availability
“The edible oil market has perked up after the removal of stock limits and on concerns of bad weather affecting planting in Brazil and Argentina. The Indian prices are firming up in reaction to global developments, where the availability of soyabean and soyameal is tight. Soyameal prices in South America will remain high aiding exports of the Indian meal. On Monday, soyabean prices were up by ₹100-300 a quintal on demand from crushing plants. With rising prices there is an expectation that market arrivals will increase,” said Rahul Chauhan of IGrain India.
SOPA has pegged the 2022 soyabean crop at 120.39 lakh tonnes, higher than 118.89 lakh tonnes last year. SOPA’s crop estimates are lower than the Agriculture Ministry’s first advance estimates of 128.92 lakh tonnes. The carryforward stocks of soyabean at the beginning of the oil year 2022-23 starting October are estimated at 25.09 lakh tonnes, about 12 times more than 1.83 lakh tonnes a year ago.