The spread of coronavirus in China has an unlikely affect in India’s commodity markets, with the prices of both soyabean and cotton correcting sharply in the last few days.
As import prospects of China dim due to the spread of the virus, market analysts feel this will have affect the markets.
Since it was reported in the Chinese city of Wuhan, coronavirus has spread in mainland China, with fears being expressed of it spreading across the globe. The World Health Organization has reported around 3,000 suspected cases and 100 deaths due to the virus. The Chinese government has launched an all-out effort to control the spread.
The spread of the virus has affected the financial markets across the globe with crude oil and agri commodities feeling the pinch. Prospects of less imports by China, market analysts say has brought about the chills in the financial markets.
Soyabean prices have seen a sharp correction globally, given the fact that China is the largest importer of the oilseed. In 2018-19 the country imported 86.74 million tonnes (mt) of the oilseed.
While India does not figure in the list of importers to China, the country’s soyabean prices have been affected. At Latur’s wholesale market, which is the largest oilseed and pulses market in the country, the average traded price of the oilseed corrected by over Rs 200 per quintal in the last seven days. As against the Rs 4,200 per quintal prices, the oil seed was trading, the present price of soyabean in the market is around Rs 4,000 per quintal.
This price drop, Ashok Bhutada, proprietor of Kriti Group- a Latur based oil extractor and solvent manufacturer who markets edible oils under the brand name of Kirti Gold, said was mostly due to uncertainty over oil imports by China. “With the coronavirus spreading in China, imports of palm oil from Malaysia will be hit. This has caused a sharp correction in the world oil markets with wholesale price of most oil dropping by 10 per cent. The effects of the same are seen in prices of soyabean also,” he said. Also the Indian government’s see saw in term of import duty on edible oils has affected this.
Like soyabean, prices of cotton have also seen a sharp correction since the last 15 days which traders attribute as a fall out of the spread of the virus.
📣 The Indian Express is now on Telegram. Click here to join our channel (@indianexpress) and stay updated with the latest headlines