Despite a good soyabean crop this year, the crushing industry is in a fix as arrivals of the oilseeds are low, while prices of soyameal are up amidst muted demand in both domestic and export markets. As a result, crushing in the first three months of the oil year (October 2021-September 22) is down 37 per cent at 21 lakh tonnes (lt) compared with 33.5 lt in the same period ayear ago, the Soyabean Oil Processors Association (SOPA), the apex trade body said.

Arrivals of soyabean during October-December were lower by 23 per cent at 40 lt (52 lt in the year-ago period) as farmers continue to hold their stocks anticipating higher prices.

As per SOPA, the 2021-22 crop is estimated at around 119 lt, 14 per cent higher than last year’s 104.55 lt. Including the carry-forward stocks and imports the total crop is estimated at 124.72 lt (115.19 lt). After factoring in the seeds for sowing, the total availability for crushing is pegged at 112.72 lt (100.19 lt).

SOPA said farmers and traders continue to hold a stock of 90.86 lt as of January 1, about 37 per cent more than 65.93 lt a year ago. The modal price (rate at which most trades take place) are ruling between ₹5,200 and ₹6,350 per quintal in various markets of Madhya Pradesh. However, compared with the last year’s prices, considered abnormally high, prices this year are lower.

“The crushing industry industry is facing challenges on three counts – lack of parity in crushing resulting in lower oil recovery, lower availability of the beans and muted demand from both domestic and overseas markets,” said D N Pathak, Executive Director, SOPA.

“There’s no parity in crushing as the recent duty cuts on soyabean oil import has impacted the recovery from oil, forcing crushers to increase the meal prices. The duty on soyabean oil has gone down by ₹35 a kilo. Earlier, the portion of soyabean oil recovery was 40 per cent and now it is 29-30 per cent. So, the 10 per cent has to be added to the meal price. On top of it there are imports, weighing on the prices,” Pathak said.

Also, the prices of bean are high as farmers hold back their produce. Crushing is low because the demand is low as imports are still coming in. In fact this month again about a lakh tonnes of import is coming, Pathak said.

The imports of the soyabean meal in Oct-Dec period stood at 4.32 lakh tonnes from 0.01 lakh tonnes in the same period last year. The Government, amidst spiralling prices last year, had allowed imports to meet the poultry sector demand.

With crushers increasing the prices of soyabean meal to offset the lower oil recovery, the exports of the meal have also taken a hit. “Prices are high as a result, export are not possible. Whatever exports are happening is due to the old contracts. There is no new demand and no order books. We don’t see any major exports happening,” Pathak said.

The exports of the soyabean meal are also muted as the prices are higher at around ₹55,000-56,000 per tonne. Exports during October-December period were 3.81 lt, down 44 per cent compared with 6.89 lt a year ago. Also, the domestic consumption for feed purpose is lower at 15.5 lt, from 16 lt in the year-ago period.

Related Topics
comment COMMENT NOW