Indian soy arrivals double in a fortnight

With farmers responding positively to a marginal increase in prices, soy arrivals have doubled this fortnight in India.

 

Small- and medium-scale farmers have started to offload their inventories while large-scale ones are holding their stocks anticipating a further spurt in prices.

 

At the mandis in Indore, a total arrival of 700 tonnes was seen on Tuesday (Apr 14).

 

According to co-ordinator of the Indore-based Soybean Processors' Association (SOPA) Rajesh Agarwal, total arrivals in Madhya Pradesh were recorded at 100,000 bags of 100 kilogrammes each as compared to 50,000 bags a fortnight ago.

 

Crushing units had reduced their capacity utilisation to 40 percent because of lower raw material availability and squeezing margins between the rising prices of the raw material, soy, and the falling realisation for the finished product, soy oil.

 

Soy prices have risen 5 percent or Rp110 to Rp2,460 a quintal as compared to Rp2,350 a quintal a fortnight ago.

 

Agarwal said farmers were sceptical earlier to sell beans in the hope of even higher prices, but they are now coming aggressively to release their holding to take the price benefit.

 

SOPA continues to estimate higher output between 9 and 10.5 million tonnes in 2008-09 as compared to 9.6 million tonnes last year.

 

An analyst said prices in the domestic market were supported by the spurt in the international market, especially because of the recent cold weather in the US which has threatened a delay in planting.

 

He also said that the US Department of Agriculture (USDA) cut 20 million bushels off its 2008-09 US soy ending stocks figure at 165 million bushels, reflecting a 25- million increase in exports, adding that if its forecast is realised, it would be the tightest domestic bean supply in five years.

 

 

A decline in global soy supplies comes at time when importers, led by China, have stepped up imports. China bought 3.86 million tonnes of soy in March, a rise of 66.6 percent from the same period last year.

 

The analyst said that this is a testing time for Indian farmers as they can cash in on the higher prices and exit from the extra expenses of stock holding amid uncertainty of further price rise, adding that another spurt in prices may fetch higher realisation of existing wealth.

 

Soy auction prices for mandi delivery in Indore mandis surged marginally by Rp10 to trade between Rp2,460 and Rp2,480 a quintal while traders remained upbeat between Rp2,465 and Rp2,485 a quintal.

 

Following bean, meal prices for Mumbai delivery also jumped Rp20 on Monday (Apr 13) to trade between Rp2,310-2,315 per quintal while the same for Kakinada delivery also rose similarly to move between Rp2,305-2,310 per quintal.

 

US$1 = Rp49.81 (Apr 14)