Soybean production projected to fall

Arrivals in Madhya Pradesh generally reach 4-5 lakh bags of 100 kg each in October but this year they won't exceed 2.5-3 lakh bags

Soybean prices are on the rise due to lower productions estimates for this kharif season, traders say.

“Within a week, prices rose 20 per cent, more than Rs 600/100 kg gains, in spot markets due to the lower production estimates,” said Hitesh Agrawal, a soybean trader here.

According to the Soybean Processors Association of India’s latest estimates, production this kharif season is likely to stand at 8,642,600 tonnes, compared with last year’s revised estimate of 9,000,000 tonnes. This year, the carryover stock is likely to be 900,000 tonnes.

Traders in major mandis said the initial arrivals clearly indicated lower production. “In October, arrivals in Madhya Pradesh generally stand at 400,000-500,000 bags of 100 kg each but this year, the numbers are low. We do not expect peak arrivals in the state to exceed 250,000-300,000 bags this season,” said B L Saini, a soybean trader at the mandi here.

Soybean production in Madhya Pradesh is the highest in the country.

Currently, arrivals across India stand at around 550,000 bags of 100 kg each, including average daily arrivals of 250,000 bags in Madhya Pradesh and 125,000 bags in Maharashtra and 75,000 bags in Rajasthan.

Prices at mandi auctions are Rs 3,450-3,800/100 kg, while plant delivery prices are Rs 3,650-3,800/100 kg. Analysts say prices have risen more than 20 per cent on futures exchanges compared to mid-August.

“Initially, production estimates were higher, due to which prices went down in August. But later, a dry spell and lower output fears pushed up prices,” said Ajay Kedia, director of Kedia Commodities. He added technically, prices were strong but profit-booking was likely in the coming days.

Meanwhile, the Solvents Extractors Association of India has said India’s oilmeal exports rose four per cent to 113,913 tonnes in September compared to the year-ago period. The rise, however, was aided by a low base, it added.

Exports of rapeseed fell 8.2 per cent to 60,211 tonnes.

For April-September, overall oilmeal exports stood at 723,661 tonnes, compared with 1,024,370 tonnes during the corresponding period last year, down 29 per cent.

“Soybean crushing has been reduced due to continuous disparity and high prices in the domestic market affecting overall domestic availability,” the Solvents Extractors Association of India said.

For the April-September period, soybean meal exports stood at 42,743 tonnes, compared with 111,027 tonnes in the year-ago period.

“Capacity utilisation is at the lowest and many plants have been closed due to disparity in crushing and exports,” the association added.