NEW DELHI: Higher soya oil imports and bearish sentiment in the international markets are pulling down soya bean prices at home.
Spot prices of soya bean were hovering between Rs 3,300 and Rs 3,470 per quintal between January and April, but gained 22 per cent to a high of Rs 4,217 a quintal in May. In the futures market, the price moved up to Rs 4,380 a quintal in the first week of May from Rs 3,406 in January-end. The price is now backing at Rs 3,300 a quintal.
Higher soya oil imports have been weighing on soya bean prices since the beginning of the year. In May, the prices went up when the government proposed to increase duty on edible oil imports. However, imports continued to be higher as international soya oil was cheaper even after the levies and freight charges.
Import of soya oil has been affecting crushing in the domestic market. “As per market sources, crushing has been very low this time due to lower price realisation. Despite the duties and freight charges, imported soya oil is cheaper than that in the domestic market,” said Ritesh Kumar Sahu, analyst for agrocommodities at Angel Commodities.
Available data shows the country imported 2.89 lakh tonne of soya oil in May and 1.54 lakh tonne in June. Between November and June, total imports stood at 15.04 lakh tonne against 9 lakh tonne during the same period last year. The demand for Indian soya meal has also fallen in the domestic market. Between April and June, the country exported 1.6 lakh tonne of soya meal against 3.2 lakh tonne during the same period last year.
“The demand for Indian soya meal was weak due to price disparity, largely on unattractive quotes compared with other exporting countries such as the US, Brazil and Argentina. Vietnam brought down Indian imports and Iran, after the sanctions were lifted, is seeking cheaper soya meal from other countries,” Sahu said.
Prices of both soya bean and soya oil in the Indian market are ruling higher than international prices. India’s non-genetically modified soya bean commands a higher premium. But the prices have been bearish in the international market due to higher production estimates for the year.
Record production is expected in Brazil and Argentina and the area under cultivation has gone up in the US. Reports also suggest that good weather conditions in the soya bean crop growing states in the US may lead to bumper production.
