Soya bean price won’t ease amid lower output concerns
Sep 15 2013 , Chennai
Slump in rupee raises export demand for soymeal from India
In the first week of July, soya bean prices stood at Rs 3,235 per quintal in the futures market. It dropped to a low of Rs 2,838 by the end of July, as reports about higher acreage and increased levels of sowing has been putting pressure on the prices.
The acreage in the soybean growing states like Maharashtra, Madhya Pradesh and Rajastan has moved up from 106.5 lakh hectares last year to 129 lakh hectares this year. The production estimates for the year also was higher at 126 lakh tonnes this year against the crop size of 115 lakh tonnes last year, said Rajesh Agarwal, spokesperson, Soybean Processors Association of India.
By August, prices gradually started to move up with reports coming in about crop damage due to rains in some of the soya bean growing areas. By mid-July prices in the US also started moving up following the dry weather conditions and heat wave in US Midwest. International prices went up from $15.93 per bushel to $17.29 per bushel in mid-August, said Vedika Narvekar, senior research analyst, agri commodities, Angel Commodities.
Meanwhile, domestic prices saw a high of Rs 3,700 per quintal in the Indian futures market by August 28. The depreciating rupee also upped the export demand for soya meal from the country. “Against 10,006 tonnes of soya meal exports in August 2012, the shipments went up to 1.83 lakh tonnes in August this year and this was even higher than 1.07 lakh tonnes in July,” said Narvekar.
In September, the US Department of Agriculture downsized the monthly production estimates from 3.255 billion bushels to 3.149 billion bushels. The ending stocks too had come down from 220 million bushels in August to 150 million bushels in September.
The dry weather in Brazil and Argentina, where the sowing starts in the month of October, also raised concerns about global production.
While these developments kept international prices still bullish, the domestic prices have eased from Rs 3,700 levels to Rs 3,350 levels by second week of September mainly due to the recovery in rupee.
“With the onset of harvest season, prices should have further come down. But they are currently at Rs 3,350 levels. Prices have a support at Rs 3,200 and the current resistance is around Rs 3,700. But further drop is not likely if international prices stay firm,’ said Narvekar. zz