A lower-than-usual demand for Indian soybean meal is proving to be a blessing in disguise for soybean processors, as it has kept soybean prices in check despite a steep fall in production estimates this kharif season.
The production estimate has been revised downwards to 74 lakh tonnes from 87 lakh tonnes estimated in kharif 2014. Soybean is processed for making refined soybean oil for domestic consumption and soymeal for animal feed, which is mainly exported.
“Lower soybean production this year notwithstanding, there will be no shortage of soybean meal for domestic use because exports are likely to be only 2.50 lakh tonnes,” SOPA said in a statement.
Soybean prices are ruling at around Rs 3,900 per quintal after spiking to Rs 4,200 per quintal earlier this year, while refined soya oil is stagnating at around Rs 620 per 10 kg.
A look at the prices on the futures market NCDEX indicates that prices are more or less in line with the spot prices.
Soybean prices are influenced by many factors including the climate, the level of household consumption, the supply and demand of domestic and international stock and futures markets and stock held back by the farmers.
Soybean is primarily grown in rain-fed areas of Madhya Pradesh, Maharashtra and Karnataka. Even though the start to the sowing had been good and cultivation area had gone up marginally, the yield has fallen drastically this year.
The state agriculture department has cited erratic rainfall and pest attacks as factors that affected soybean crop.