The Centre’s decision to increase the minimum support price for soya bean at the time when international prices are falling is forcing soya crushing units out of business, Indore-based Soya Processors Association of India has claimed.
The MSP for soya bean was raised by at least 10% to Rs 3050 per 100 kg from October 1 from Rs 2775 last year.
On the other hand, soya bean from Brazil and Argentina, the two main players in the international market, is coming at a cheaper price because of 7% fall in the value of rupee as compared to a dollar.
“There is no ‘crushing margin’ left and I fear that many of the crushing units will have to close down,” SOPA chairman Davish Jain said.
Madhya Pradesh, which recently witnessed farmers’ protests in Mandsaur region demanding better prices for their produce and loan waiver, accounts for more than 60% of India’s soya bean production followed by Maharashtra and Rajasthan.
The association had demanded that the import duty on degummed soyabean oil should be increased from 12.5% to 37.5% and that on refined oil from 20% to 45% to offset the difference in prices.
{{/usCountry}}The association had demanded that the import duty on degummed soyabean oil should be increased from 12.5% to 37.5% and that on refined oil from 20% to 45% to offset the difference in prices.
{{/usCountry}}However, the Centre increased duty on degummed oil to 17.5% and left the refined oil duty unchanged, thereby not compensating the losses that the soya processing units are facing.
“Raising the duty to that permitted level will help both the domestic industry and our farmers in these troubled times,” said Jain.
He argued the industry was not in a position to pay higher prices to domestic farmers as the processing units can pay only Rs 2700 per quintal if they have to compete with international players.
The soya bean sector was, interestingly, a net foreign exchange earner till a few years ago, with exports of meal exceeding imports of oil. That situation has, however, reversed since 2013-14.