The average traded price of soyabean has crossed Rs 4,000 per quintal, and this unusual bullish trend in the market is mainly due to reports of extensive crop damage in the main soyabean-growing states of Madhya Pradesh and Maharashtra, which could see the country’s oilseed production being revised to 90-92 lakh tonnes (lt).
The shortfall in supply will result in minimal export of the deoiled soya cake, said Naresh Goenka, vice-president of the Soyabean Processors Association of India (SOPA).
In its second crop estimate of October 10, SOPA had said the country’s soyabean production was at 104.552 lakh tonnes (lt) as against the 93.062 lt of last year. Back then, SOPA had also warned about the impact of crop damage in Madhya Pradesh and Rajasthan, mainly due to rain and attack of yellow mosaic virus, stem fly, Anthracnose and other pests. But the crop in Maharashtra was in good condition, stated SOPA.
However, the recent spate of heavy rain which lashed Maharashtra also damaged the crop in many parts of the state, said Goenka. “We feel as against the earlier estimates, production will be around 90-92 lt,” he said.
As reports of crop damage started coming in, the average traded price of the oilseed saw a steep rise in most wholesale markets of the state. At Latur’s wholesale market, the average traded price of soyabean was Rs 4,030 per quintal, with the market reporting arrival of 33,956 quintals of soyabean on Monday. At Akola’s mandi, 6,594 quintals of oilseed had arrived, with the average price at Rs 3,900.
Soyabean, traders say, will trade mostly above the government-declared Minimum Support Price (MSP) of Rs 3,880 per quintal for the present season. Goenka said a price correction is possible once arrivals pick up, but overall the price would remain on the higher side for the rest of the season. Export of deoiled soya meal, the solid left after the oil is extracted from the beans, will take a hit this season as not much will be available for trade.
Another reason for the price rise, according to Goenka, was due to reports of dry weather in Argentina and Brazil affecting the sowing season in these countries. Earlier this month, soyabean prices at the Chicago Exchange had crossed the $ 10.50 per-bushel mark after two years.
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