Agri Business

Poor domestic offtake drags soya oil

| Updated on: Mar 14, 2011
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Both soyabean and soy oil continued to trade lower in Indore mandis on weak domestic demand and bearish global markets. Spot soyabean prices fell Rs 30-40 a quintal on lack of support in the foreign markets, more so because of the recent earthquake and tsunami in Japan and weak demand from plants. However, as compared with its prices on Saturday, soyabean remained firm at Rs 2,200-2,250 a quintal on the back of depleting arrivals and declining demand. With the arrival of other seasonal crops like wheat, chana, and masoor gaining momentum in Indore mandis , farmers are reluctant to release their soyabean stocks keeping in view its low prices. Further drop in arrival of soybean in State mandis is an indicator of this, said Mr Mukesh Purohit while talking to Business Line .

On Monday, mandis across Madhya Pradesh witnessed arrivals of 20,000 bags of soyabean against 1,000 bags in Indore mandis . Besides, weak buying by plants, decline in soyabean futures on the National Commodity and Derivatives Exchange (NCEDX) also contributed to bearish sentiments in soyabean. On the NCEDX, soyabean April and May contracts closed Rs 16 and Rs 28 lower at Rs 2,286 and Rs 2,309 a quintal respectively.

On the other hand, with plant operators building up stocks of soyabean, the demand for soy seeds has also declined, leading to further decline in its prices. On Monday, plant deliveries of soyabean were quoted Rs 50-60 lower at Rs 2,280-2,300 a quintal. Soyabean plant deliveries on Saturday quoted at Rs 2,275-2,360 a quintal. Soyabean continues to rule sluggish with its price in Kandla port on Monday quoting Rs 200 lesser at Rs 18,100 a quintal.

According to traders, the demand for soybean will remain subdued with farmers showing more interest in other seasonal crops, whose arrivals have picked up in Indore mandis . Against arrivals of 1,000 bags of soyabean in Indore mandis , 13,500 bags of chana and 7,000 bags of wheat arrived on MOnday.

Weak foreign support and drab domestic demand have also kept the soy oil prices in the red zone. With positive correction in Malasiyan palm oil futures in the evening, soy refined oil showed a marginal gain with its prices in the spot and delivery quoting at Rs 570-575 for 10 kg against Rs 575-578 on Saturday. The demand for soy refined oil in the domestic market continued to remain poor with lack of interest buying by traders. Soy solvent also ruled firm at Rs 535-540 for 10 kg on scattered buying.

The National Board of Trade witnessed second cut of the month, and its April contract closed at Rs 604.3. April contract of soy refined oil on the NBOT closed about Rs 4 higher at Rs 613.6. Soy oil futures on the NCEDX also traded low on weak buying support with April and May contracts closing at Rs 601.1 and Rs 606.5 for 10 kg.

Published on March 14, 2011

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