December 13, 2003

 

 

Higher Soybean Prices in India as Farmers Withdraw Supplies

 

In India, soybean prices have shot up over Rs 1,000 per ton due to poor arrivals and farmers are withdrawing supplies anticipating higher prices.

 

"Soybean arrivals are meagre as the farmers feel the prices will go up in view of a tight situation in the global market," Mr Rajesh Agrawal, Chairman of the Soyabean Processors Association of India, told Business Line.

 

Currently, soybean prices are quoted at Rs 14,500-15,000 per ton against Rs 13,000-13,500 three weeks ago.

 

"One of the reason for the farmers not bringing the stocks to the market is that they have already sold the quantity that they normally would sell in a typical boom year," Mr Agrawal said.

 

"Now, they don't require cash immediately and, therefore, they are holding back," he said.

 

"Farmers have got whatever money they want. Therefore, the process of bringing in the cargo has slowed down," said Mr Vinod Jathliya, a trader. "Why can't they hold back to realise better prices?" he asked.

 

Analysts said the farmers were also watching the progress of sowing in Brazil, whose crop is expected to arrive in the market in February.

 

"With the growing areas in Brazil experiencing dry weather, concerns have been expressed over the crop there," they said.

 

While soybean prices have increased sharply in the country, soy meal rates have stabilised around $245 a ton free-on-board. Soy meal prices had galloped to over $265 a tonne early last month as China scoured for materials for compound feed. With China keeping a low profile, the prices have declined, though they are still over $50 a tonne higher than the same period last year.

 

Soybean and soy meal prices are up this year on poor US crop that was hit by hot weather.

 

Indian soy farmers have been the main beneficiaries with good prices coming in at a time when production has bounced back to 71 lakh tonnes from 45.2 lakh tonnes last year.

 

According to the Solvent Extractors Association of India, soy meal exports in November were around 4.8 lakh tonnes, up from 2.36 lakh tonnes during the same period last year. Exports have been made to South Korea, Indonesia, China, Pakistan and Japan.

 

"We have got contracts to export 17-18 lakh tonnes of soy meal this year," Mr Agrawal said.

 

Soy meal movement to the ports, on the other hand, has been a bit tardy on inadequate availability of railway wagons. Availability of the wagons, especially from Madhya Pradesh, a land-locked State, to Kandla and Bedi ports in Gujarat have been hit. "But things are moving slowly," Mr Agrawal said.