Bumper production but slim chances of price appreciation put soyabean farmers in a spot

At Latur’s wholesale market in Maharashtra, which is one of the largest soyabean market in the country, the average price of the oilseed is around Rs 4,680/quintal as against its MSP of Rs 4,600. Prices are set to correct more once the harvest and arrival of the crop starts.

Vilas Uphade, director of the Latur-based Vikas FPC, said the crop in and around Latur is in good condition and farmers are expected to start the harvest operations in the next 15 days.

“What we are worried about now is the price. Traders have already ruled out the possibility of much appreciation this year,” he said. Like Uphade, most farmers do not appear to be optimistic about windfall gain in soyabean this year. One of the main reasons, oil expellers and solvent extractors, say is the easy availability of imported oil at 5.5 per cent duty. Faced with an unprecedented rise in edible oil, the Centre had slashed the import duty on all major edible oils to zero in October last year. The effective duty on crude palm, soyabean and sunflower oil is just 5.5 per cent.

As a result of this, the domestic market is now flooded with cheap imports, which has virtually ruled out any chances of price correction for farmers in the days to come. The Solvents and Extractors Association of India has recorded import of 141.21 lakh tonnes of vegetable oils in the first 10 months of the 2022-23 (November- October) oil year as compared to 113.76 lakh tonnes of import that country had seen during the first 10 months of the 2021-22 oil year. Easy imports have resulted in the country being flooded with palm oil, the Association said.

Naresh Goenka, vice president of SOPA, talked about the crop condition being more or less satisfactory in the country. “We do not see immediate price correction in the markets as of now,” he said. The lower than last year’s realisation in soyabean can cause problems for the ruling BJP as it seeks re-election in Madhya Pradesh where the oil seed. is a major kharif crop. A source in the oil industry said the government is not in the mood to ease imports immediately.