June 16, 2008

 

India soy prices to hit new highs on low supply

   
 

India's soy prices are expected to hit new highs starting October 1 due to lower supply and hike in global crude prices, industry officials said.

 

Indian farmers may not sell soy crop below the INR1,800-2,000 per 100 kilogramme levels in the new crop year, up from last year's INR1,500-1,600 levels.

 

Soy prices are expected to exceed the government-fixed minimum support price (MSP) of INR1,050 in the 2007/08 season.

 

The MSP is the least traders must pay farmers.

 

Ashok Sethia, president of the Solvent Extractors' Association of India, a leading trade body, said that once the new crop comes, prices will come down and the extent will depend on the international scenario.

 

However, prices will not fall below INR1,800 per 100 kg, Sethia added.

 

Ravi Bhushan, an analyst in ICICI, India's second largest bank, said sowing has already started but soy prices are still rising to new highs.

 

Bhushan estimates in the new crop year to see new floor price of about INR1,900 despite an expected rise in production.

 

Indian soy October futures were trading up 1.41 percent at INR2,265 on the National Commodity and Derivatives Exchange.

 

Acreage is projected to rise by 13 percent to a record more-than-10-million hectares between June and September as more farmers move to soy for better prices, a trade official said.

 

US$1 = INR42.89 as of June 16, 2008