Soybean prices traded steady across the country during the week amid limited trade activity.
Farmers on 14th June called off their two week long strike but on 15th June traders in Madhya Pradesh went for one day strike to protest the roll out of GST from July. On 16the June most of the market yards opened but trading activity was limited as farmers don’t want to sell soybean at lower prices whereas traders were reluctant to purchase soybean due to roll out of GST in July as there is lot of confusion about GST in traders mind so they want to carry minimum stock of soybean in July.
Prices at the benchmark Indore market during the week traded steady at Rs 2,840/100kg.
Total arrivals during the week, were reported to be lower at 0.55 to 0.75 lakh bags on farmer’s reluctance to sell at current prices and anticipating better prices at Rs 3,000/100kgs for the crop.
Indian government has increased the minimum support price (MSP) for 2017-18 soybean crop by Rs 275/100kg to Rs 3,050/100kg.
Even though MSP of soybean for 2017-18 has increased still farmers are likely to shift to other lucrative crops such as cotton, maize and urad as they have got poor realization of soybean in 2016-17 and farmers have also lost hope as government have not make any good policies so that traders will be compelled to buy soybean at MSP.
In current scenario in most of the market yards soybean is trading below MSP.
Progress of monsoon has slowed down which is considered as bullish factor for soybean. Farmers have to delay their sowing activity on account of slow progress of monsoon.
Soybean prices last traded at Rs 2,745-2,840/100Kg in benchmark Indore market of Madhya Pradesh unchanged a week ago.
In futures market, Soybean most active July contract during the week was up by 0.53 percent at Rs 2,800/100kg on the National Commodity & Derivatives Exchange Ltd (NCDEX).
SOYMEAL
Soymeal at the benchmark Indore markets gained by Rs 200 to trade at Rs 23,500 per tonne during the week amid improved demand by poultry feed manufacturers in week ending 17 June.
Most of the poultry feed manufacturers are anticipating that demand of broiler chicken will increase in July month as temperatures in all over India will decline and people like to eat non-veg food when weather is cool so poultry farmers are likely to place more chicks in coming days which will increase the consumption of soymeal.
Chicken consumption in India is growing at 11 per cent CAGR and as per a National Sample Survey Office report, per capita consumption in India is beyond 4 kg.
Price of broiler chicken has declined by Rs 5 to trade at Rs 87/kg at benchmark Delhi market in week ending 17th June due to lower demand.
Indian Soymeal is priced at $387 per tonne FAS Kandla Vs $352 Argentina CIF Rotterdam (June) as of June 17, 2017. The difference between the two origin is $35 per tonne unchanged over previous session.
Indian soymeal is trading at a premium of $35 compared to Argentine soymeal which is on higher side so India can not get bulk export orders of soymeal.
Overseas buyers are ready to pay premium of $10 for Indian soymeal as it is non-genetically modified whereas Argentine soymeal is genetically modified.
SOYOIL
A steady trend followed in refined soy oil in benchmark Indore market of Madhya Pradesh on account of limited demand. Soy oil at benchmark Indore market was steady at Rs 627/10kg during the week. Refined soy oil prices will also get support in near-term as rival mustard oil Kacchi Ghani is still trading at a premium of Rs 8/Kg versus soy oil.
Soy oil prices were higher by USD 13 to trade at 812 per tonne in dollar terms (CNF) at Kandla port and also gained by Rs 10 to trade at Rs 610/10kg.
There is very limited trading activity in physical trades as most of the traders are busy in clearing their old stock before the roll out of GST in July.
There is lot of confusion among traders regarding GST so they don’t want to carry heavy stock of soy oil in July.
Port stock of soy oil has decreased to 1,29,028 tonnes from 1,60,370 tonnes which will provide support to soy oil prices.
In futures market, soy oil most active July contract on the National Commodity & Derivatives Exchange Ltd (NCDEX) ends up by 0.51 percent at Rs 637.25/10kg.
NEXT WEEK:
Soybeans in the local markets is likely to trade with a bullish bias due to the restricted farmers selling keeping the supplies tight coupled with slow progress of monsoon which will keep the market sentiment positive for short term.(By Commoditiescontrol Bureau; +91-22- 40015516)
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