March 3, 2014

Buoyed by low supplies and fear of damage to Rabi oilseed crop because of unseasonal rainfall in Rajasthan, Madhya Pradesh and Gujarat, India's soy prices have risen substantially in a fortnight.

"Soy supplies have been declining every day since last week for various reasons like rainfall and holidays in physical markets among others," P Goyal, a soy trader in Indore, said.

Soy arrivals in Madhya Pradesh were around 60,000 bags of 100 kilogrammes each compared to 85,000 bags a fortnight ago.

General price in Indore mandi auctions ranged between INR3,900 and INR4,100 (US$63 and US$66) per 100 kilogrammes compared to INR3,500-3,850 (US$56.60-62.20) per 100 kilogrammes a fortnight ago.

Plant delivery prices were INR4,100-4,175 (US$66.30-67.50) per 100 kilogrammes compared to INR3,900-3,975 (US$63-64) per 100 kilogrammes a fortnight ago.

Madhya Pradesh is the largest producer of soy in India and Indore is the soy trade hub of the country.

Traders feel unseasonal rains this week in major mustard producing states like Rajasthan, Madhya Pradesh and Gujarat are responsible for rise in prices of soy.

In the beginning of this week, domestic soy prices also got good support from overseas cues like unfavourable weather for soy crop in South American countries like Brazil and Argentina.

Analysts and traders feel soy prices may gain further in the coming days due to continued low supplies and reports of damage to mustard crop in many areas in Madhya Pradesh, Rajasthan and Gujarat.