iGrain India - Slow government procurement leads to huge fall in soybean pricesWeekly Review of Soybean Prices: November 15–21, 2024Key Highlights:
- Soybean prices have fallen significantly in major producing states such as Madhya Pradesh, Maharashtra, and Rajasthan due to a large influx into markets and slow government procurement.
- Despite the 20% increase in import duties on edible oils, soybean prices continue to decline, negatively impacting soy oil and soymeal prices.
- The plant delivery price of soybean dropped by Rs 100-200 per quintal during the week.
- In Ujjain, the price fell by Rs 275 per quintal.
- The minimum support price (MSP) for soybean has increased from Rs 4600 to Rs 4892 per quintal. However, market prices remain around Rs 4200-4300 per quintal, significantly below the MSP.
- Soybean producers receive an assistance amount of Rs 5000 per hectare, which is considered insufficient to cope with the price drop.
- The price of soybean in Maharashtra has been reported between Rs 4350-4450 per quintal.
- The state government has announced a procurement rate of Rs 6000 per quintal, which could potentially improve market prices.
- The price of refined soy oil has also seen a downward trend:
- In Ujjain, the price fell by Rs 45 to Rs 1280 per 10 kg.
- Other regions such as Maharashtra, Kota, Kandla, Mumbai, and Haldia saw price reductions ranging from Rs 10-25.
- Soybean DOC (de-oiled cake) prices fell sharply, from Rs 500-700 to Rs 2000, reflecting weak demand but offering potential for increased domestic and export demand at lower price points.
- Soybean arrivals increased significantly, from 3.35 lakh bags on November 15 to 7.50 lakh bags on November 18, with daily arrivals ranging between 5-6 lakh bags thereafter.
- The slow pace of government procurement is being blamed for the price decline, as the large supply in the market is not being absorbed quickly enough.
- Despite a slow start in government procurement, some improvement in soybean demand (both domestic and export) may occur as prices have reached a level that could stimulate interest. However, the ongoing price decline remains a concern for farmers in key producing states.