April 26, 2007

 

India's soybean prices fall on slow oil extractor demand

 

 

Soybean prices in India have plunged in both spot and futures markets due to low demand from oil extractors as soyoil and soymeal prices decline, traders said.

 

Radha Vallabhji Purohit, a Nagpur-based trader said oil mills stay away from fresh buying due to falling soyoil and soy meal prices.

 

He said oil mills will start buying if soymeal prices increase as they still have enough stock to run their units for next few days.

 

On Wednesday, the May soybean contract on the National Commodity and Derivatives Exchange fell by 0.85 percent to 1,511.95 rupees per 100 kilogramme (kg), a 4.91 percent fall since April 2.

 

In same period, the spot price in the Indore market fell by 62 rupees to 1,534 rupees per 100 kg.

 

An Indore-based trader said the drop was due to low demand for soymeal from exporters and domestic consumers. The decline was also due to stronger rupee currency, the trader added.

 

Soymeal for Mumbai port delivery was quoted at 11,150 rupees per tonne on Wednesday, from 11,650 rupees on April 2.

 

Purohit said the trend in only on a short-term basis and prices will again recover within few weeks on active soymeal buying as the coming soybean harvests will have farmers hold their stocks in anticipation of better prices.

 

In India, soy oil is used as edible oil while soymeal is largely used for cattle feed.

 

The farm ministry has estimated India's oilseeds output at 23.26 million tonnes this year, down from 27.98 million tonnes in 2006.