Problem of plenty for soya

The recent cancellation of four shipments of 13,000 tonnes each of soyameal by China due to bird flu fears and a bumper harvest in India hav...

The recent cancellation of four shipments of 13,000 tonnes each of soyameal by China due to bird flu fears and a bumper harvest in India have put undue pressure on soya prices.

Prices of soya by-products — soyal oil, soyalmeal and soyabean — as a result, have fallen steeply, particularly in the futures market. The arrival of large quantities of soyabean in the market too hasn’t helped. Over 9 lakh soybean bags of 90 kg each are estimated to be hitting the Indian markets.

The November contract rates for one quintal of soyabean, which was trading at Rs 1,231 on October 27 at the NCDEX, plunged on Friday to Rs 1,183 after touching Rs 1,400. Soyabean is trading close to its record low of Rs 1,174. Long-term contract prices too have fallen, but not as steep as the short-term rates as traders expect more clarity soon.

The December contract for soyabean has slipped from Rs 1,234 on October 27 to Rs 1,204 on Friday. Similarly, the January contract dropped from Rs 1,250 on October 27 to Rs 1,221. The February and March contracts too fell to Rs 1,230 and Rs 1,241 from Rs 1,267 and 1,282.

Soyameal, an important byproduct of soya, too hasn’t bucked the trend. The November contract for one metric tonne of soyameal has declined to Rs 8,400 from Rs 8,600 quoted on October 27. Following the trend, the December contract fell to Rs 8,300 from Rs 8,700. While the January contract remained flat at Rs 8,499, the February contract was down to Rs 8,250 from Rs 8,300. Same has been the case with refined soyaoil. The November contract for 10 kg slipped from Rs 357 to Rs 347 while December contract fell to Rs 354 from Rs 360.

A further price decline was arrested after one of the four shipments booked by China was sold to the Philippines. Chinese buyers had bought soyameal at about $235 a tonne, including cost and freight against the Indian price of $225 a tonne. ‘‘The good news is that the shipment has been sold to dealers from the Phillippines at a competitive price,’’ says Sushil Sinha of Geojit Securities.

Last year too China had called off soya contracts, although it was Brazil which suffered. Incidentally, China has contracted for importing 2-2.30 lakh tonnes of soyameal from India. Over one lakh tonnes had already been shipped. “Bird flu might just be an excuse. Since soya harvesting has been good throughout the world this season, they might have got a better deal from some other country forcing them to turn down the Indian contract,” said a trader.

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All this means that the future doesn’t seem to be so rosy for soya prices. “Prices are expected to fall further due to more arrivals from other parts of the country. Prices tend to fall lower during the harvesting season which is between October and December,” Sinha said.