Weekly Review-Soybean

23-Nov-2024 06:10 PM

Slow government procurement leads to huge fall in soybean prices


Weekly Review of Soybean Prices: November 15–21, 2024

Key Highlights:

  • Soybean prices have fallen significantly in major producing states such as Madhya Pradesh, Maharashtra, and Rajasthan due to a large influx into markets and slow government procurement.
  • Despite the 20% increase in import duties on edible oils, soybean prices continue to decline, negatively impacting soy oil and soymeal prices.

Price Movement:

  1. Madhya Pradesh:

    • The plant delivery price of soybean dropped by Rs 100-200 per quintal during the week.
    • In Ujjain, the price fell by Rs 275 per quintal.
    • The minimum support price (MSP) for soybean has increased from Rs 4600 to Rs 4892 per quintal. However, market prices remain around Rs 4200-4300 per quintal, significantly below the MSP.
    • Soybean producers receive an assistance amount of Rs 5000 per hectare, which is considered insufficient to cope with the price drop.

  2. Maharashtra:

    • The price of soybean in Maharashtra has been reported between Rs 4350-4450 per quintal.
    • The state government has announced a procurement rate of Rs 6000 per quintal, which could potentially improve market prices.

Soybean Oil and Soymeal:

  • The price of refined soy oil has also seen a downward trend:
    • In Ujjain, the price fell by Rs 45 to Rs 1280 per 10 kg.
    • Other regions such as Maharashtra, Kota, Kandla, Mumbai, and Haldia saw price reductions ranging from Rs 10-25.
  • Soybean DOC (de-oiled cake) prices fell sharply, from Rs 500-700 to Rs 2000, reflecting weak demand but offering potential for increased domestic and export demand at lower price points.

Arrival and Procurement:

  • Soybean arrivals increased significantly, from 3.35 lakh bags on November 15 to 7.50 lakh bags on November 18, with daily arrivals ranging between 5-6 lakh bags thereafter.
  • The slow pace of government procurement is being blamed for the price decline, as the large supply in the market is not being absorbed quickly enough.

Outlook:

  • Despite a slow start in government procurement, some improvement in soybean demand (both domestic and export) may occur as prices have reached a level that could stimulate interest. However, the ongoing price decline remains a concern for farmers in key producing states.

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