Soybean prices rise 9% since April, kharif crop may be impacted in MP

Even before its actual arrival, apprehensions of a below normal monsoon have started driving up prices of soybean. Madhya Pradesh, which accounts for half the country's output, is projected to have the worst monsoon since 2009 which was a drought year.

Soybean prices in the spot market have firmed up by over 7 per cent since early April to Rs 4,682 per quintal in Indore, a major trading hub of Madhya Pradesh. Prices are expected to remain firm till September when harvesting of the new crop begins. Soybean is a kharif crop (sown in June-July and harvested in September-November) and is dependent on monsoon rains. The soybean season runs from October to September.

"Soybean crop is expected to be impacted this year since the monsoon projection for MP is not encouraging. Except August, all rainfall months (June, July and September) are likely to be highly deficit in the state. There could be a localized drought as well", said Jatin Singh, Chief Executive Officer of private weather forecasting firm Skymet.

Processed soybean is the largest source of protein feed and a major source of vegetable oil. Soybean meal, which is extracted from soybean, is an important source of poultry and animal feed. Higher prices and a lower crop will impact the poultry sector.

"Prices are firming up because arrivals are low in the market. There are also concerns on the monsoon front. Though arrival of the monsoon is projected to be on time, we have to wait and watch to see the distribution of rainfall from sowing to growth phase", said Rajesh Agarwal, spokesperson of Indore-based Soybean Processors Association of India (SOPA), an apex body of soybean processors.
Agarwal said that domestic soybean output in 2013/14 (October-September) is estimated at 12 million tonne by SOPA.

The country exports about 2 million tonne of soybean meal annually and ranks among top five exporters of the meal. India primarily exports to South East Asia and Europe.