iGrain India - Soybean prices in India, particularly in Maharashtra, are under significant pressure due to a combination of factors. Key reasons include:
Increased Production and Market Arrivals: A good harvest this year has resulted in higher soybean arrivals in the markets, leading to an oversupply and putting downward pressure on prices.
Limited Demand from Millers and Processors: The demand from domestic millers and processors has been subdued, further contributing to the price decline.
Slow Government Procurement: Although the state government had promised to purchase soybeans at Rs 6,000 per quintal, the new government is yet to implement this. The delayed procurement process has left farmers dissatisfied and struggling to sell their stock at lower market prices, which range from Rs 4,200 to Rs 4,300 per quintal. This is significantly below the government’s Minimum Support Price (MSP) of Rs 4,892 per quintal.
Global Price Trends: On the global front, the soybean market is under pressure due to expectations of record production in Brazil and strong yields in Argentina. Additionally, the U.S. has seen an increase in soybean production, keeping global soybean prices soft and affecting Indian markets.
Impact of Cheap Soybean Oil Imports: Millers are also facing challenges due to a surge in the import of cheaper soybean oil, which has affected the domestic oilseed and oil market.
Farmers, particularly in Maharashtra, are under considerable stress due to the disparity between the market prices and MSP, and are being forced to sell their stocks to fund the sowing of rabi crops. This situation has sparked significant discontent and calls for faster action from the government.