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Seeking the SEBI’s (Securities Exchange Board of India) intervention to maintain the orderly development in soyabean contract on NCDEX futures market, the Solvent Extractors’ Association (SEA) of India has said that the market is now completely dominated by the speculators and moving upward every day.
In a letter to SEBI on Friday, Atul Chaturvedi, President of SEA of India, said both soya crushing and poultry industry are suffering in the process, and this has the potential of fuelling further food inflation in the country over the past few weeks, he said soyabean prices have reached ₹7,250 a quintal. They were just ₹5,750 a quintal a month ago. It is hard to fathom what has changed so dramatically in such a short period of time to warrant this unprecedented upswing in prices, he said.
“This excessive speculative activity has the potential to seriously disturb the smooth functioning of the solvent extraction industry engaged in processing soyabean as the availability of beans has practically dried up all of a sudden leading to all kinds of misinformation being bandied about. The poultry industry, which is heavily dependent on soyameal to feed the birds, has been driven to the wall and finding it difficult to survive in these pandemic times,” he said.
Referring to the sudden spurt in price of soyabean, Chaturvedi said that the arrivals have dropped as traders and farmers don’t sell hoping for further rise in prices. At this price, crushers find disparity of ₹4,000 to ₹5,000 per tonne of processing. In the process, the availability of soyabean meal has reduced dramatically. Price of soyameal, ex-factory, has touched more than ₹60,000 a tonne from ₹40,500 a tonne a month ago. This has created a panic in the poultry industry which is the major consumer of soyameal, he said.
“With futures market delinked from physical market, seriously impacting price discovery, we would request SEBI to examine the current scenario and take whatever suitable actions are required to maintain the orderly development of the market,” he said.
On Friday, soybean for delivery this month was at ₹7,550 a quintal at 5.15 pm on NCDEX, while May and June futures were at ₹7,158 and ₹7,038, respectively. NCDEX spot soyabean (Indore delivery) was quoted at ₹7,369 a quintal.
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