Indicus price monitor

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Soybean prices peaked last monsoon, with low stocks, poor rain prospects and a 30% rise in the minimum support price (MSP). Despite the delayed sowing, the output was a record 14.68 million tonnes, according to the 4th Advance Estimates for 2012-13.

This led to a moderation in prices and this year, with good rainfall, by mid-August, sowing for this kharif crop has covered 12.68 million hectares, against 10.64 million hectares at the same time last year. The all-India average wholesale price for a quintal of soybean oil, which had soared to a record Rs 8,138.4 last September, stands at Rs 7,809.8 a quintal in August.

However, there are some factors that can keep the prices from sliding significantly: The MSP for 2013-14 has been fixed at 13.6% higher than the previous year; heavy rainfall in the top producing states of Madhya Pradesh and Maharashtra have raised some small concerns over the quantity and quality of crop this year; there is high domestic demand and with the crop in US hit by heat in the Midwest, India stands to gain in the export market for soymeal.