Soybean prices up on tight supplies

Soybean prices have risen substantially in a fortnight due to low supplies and fear of damage to Rabi oilseed crop because of unseasonal rainfall in Rajasthan, Madhya Pradesh and Gujarat, traders say.

"Soybean supplies have been declining every day since last week for various reasons like rainfall and holidays in physical markets among others," P Goyal, a soybean trader in Indore, said.

Soybean arrivals in Madhya Pradesh on Friday were around 60,000 bags of 100 kg each compared to 85,000 bags a fortnight ago.

General price in Indore mandi auctions on Friday ranged between Rs 3,900 and Rs 4,100 per 100 kg compared to Rs 3,500-3,850 per 100 kg a fortnight ago.

Plant delivery prices were Rs 4,100-4,175 per 100 kg compared to Rs 3,900-3,975 per 100 kg a fortnight ago.

Madhya Pradesh is the largest producer of soybean in India and Indore is the soybean trade hub of the country.

Traders feel unseasonal rains this week in major mustard producing states like Rajasthan, Madhya Pradesh and Gujarat are responsible for rise in prices of soybean.

"Mustard is a major Rabi oilseed crop of the country and any harm to this crop will certainly see rise in prices of the oilseed," Hitesh Agrawal, a soybean trader in Ujjain, said.

In the beginning of this week, domestic soybean prices also got good support from overseas cues like unfavourable weather for soybean crop in South American countries like Brazil and Argentina.

South American countries like Brazil and Argentina are number two and number three soybean producers in the world after United States of America.

Analysts and traders feel soybean prices may gain further in the coming days due to continued low supplies and reports of damage to mustard crop in many areas in Madhya Pradesh, Rajasthan and Gujarat.