Rising soybean rates cheer farmers, rattle poultry and oilseed extractors

Trade sources said lack of clarity on whether or not import of GM soybean meal beyond Jan 31 has been allowed is raising market sentiments along with overall bullishness in the edible oils complex

Despite a good harvest, soybean prices have been again on the boil the past few months, benefitting farmers on the one hand but roiling the poultry industry and a section of the oilseed extraction sector on the other.

Trade sources said lack of clarity on whether the import of genetically modified soybean meal beyond January 31 has been permitted or not is pushing up market sentiments along with the overall bullishness in the edible oils complex.

Plus, there is some element of stock holding as well at the growers’ end in anticipation of better prices ahead and speculative activity in the markets.

According to data sourced from agmarket, between October and end of November, modal soybean rates in the benchmark Indore markets have risen almost 76 per cent from Rs 3,500 a quintal to around Rs 6,200.

Since November-end, the rates have moved further up to around Rs 6,700 a quintal in some markets.

The minimum support price of soybean (yellow) for 2021-22 is Rs 3,950 a quintal.

According to the first advance estimate of 2021-22 kharif crop production released by the ministry of agriculture, soybean production in the 2021-22 season is expected to be 12.72 million tonnes, which is marginally lower than the 12.89 million tonnes produced last year.

“In soybean, the oil content is about 18 per cent and the rest is de-oiled cake or soymeal, so it is the high soybean meal price which is driving the market, instead of anything else,” a senior industry observer said.

The Central government had allowed the import of 1.2 million tonnes of GM soymeal to cool down domestic prices for the first time in August, to protect a poultry industry reeling under the impact of high input costs. The imports were allowed till January 31, 2022.

Soymeal is a major constituent animal and poultry feed meal along with maize.

However, the poultry industry is pressing for extension of the deadline atleast upto March 2022 as prices are still high.

First because against a requirement of 1.2 million tonnes of imports, just around 0.6 million tonnes have arrived in the country and secondly the feed meal rates are still higher.

However, the Soybean Processors Association of India (SOPA) in a recent representation claimed that the projected demand and supply situation of soymeal is very comfortable and the fundamentals do not support any need for further imports by extending the date of shipment.

IT also claimed that latest soymeal consumption figures given by the poultry industry are highly inflated.

SOPA said that the rise in soybean prices is not in the hands of the processors and it is not because of anything done by the processing industry and they have already flagged the issue of hoarding and undue speculation of soybean futures.

“Farmers cannot be forced to sell soybean at MSP as desired by the poultry industry. Soybean farmers have as much right to livelihood and get remunerative prices as poultry farmers,” SOPA said.

However, a section of the oilseed extractors also feels that at the current prices of soybean, they too are making a loss of around Rs 3000-4000 per tonne of seed crushed.

“Till now around 1.2-1.3 million tonnes of soybean seed should have been crushed but just around 0.9 million tonnes has been crushed or extracted this year as growers are not willing to part with their produce,” a senior oilseed industry official said.