Soyabean prices bullish as traders blame stockists

Soyabean acreage had seen a slight dip across the country for the current kharif season. According to estimates of the Soyabean Processors Association of India (SOPA), the oilseed was planted on over 107.61 lakh hectares against 108.39 lakh hectares in last kharif season. However, unseasonal rains in September and floods in some of the major growing states like Madhya Pradesh and Maharashtra has put a question mark on the produce.

SOPA on its part maintained its earlier production estimate of 89.94 lakh tonnes for the 2019-20 marketing year (October-September). Right at the start of the marketing season, concerns were raised over the quality of the oilseed.

The present price range, most market insiders pointed out, are achieved after February or March when most of the farmers have already sold their produce. A trader operating in Latur’s wholesale market admitted that the present price range means farmers are directly benefiting from the prices. Naresh Goenka, vice president of SOPA, however, opined that the price hike is because of speculators and stockists entering the market.

“There is a fear that the unseasonal rains have damaged large extent of the crop so there is panic buying in the markets,” he said. It might be noted that right from the start of the arrival season, the oilseed is trading well above its government declared Minimum Support Price (MSP) of Rs 3,710 per quintal.

An year-on-year increase of almost $200 per tonne in degummed soyabean oil, Ashok Bhutada, proprietor of the Latur based oil producer Kirtigold, said has also helped in the oilseed firming up.

“There was no carry forward stock with either stockists or millers at the start of the season which has also contributed to the better prices,” he said. Most farmers have also taken to staggered buying which has kept up the pressure on markets.

The stock, both Bhutada and Goenka said, was enough for the country’s need but there might not be much exports for the current marketing year. Goenka felt around 1-2 lakh tonnes of the soyameal — the protein rich mass left after oil is expelled from the seed — will be exported this year. Bhutada talked of a further hike in prices in the months to come.