Correction in Soybean prices expected soon

As prices of soybean turn bearish with increasing market arrivals, the prospects for India’s re-entry into the overseas market for soymeal exports, especially in East and South East Asia, appear brighter.
Higher domestic prices on lower output had made Indian soymeal exports unviable in the last two years. As a result India had lost its market share in countries such as Japan and Thailand to China, a major processor and exporter of imported soybeans.
The soybean harvest has commenced in the key growing regions of Madhya Pradesh and Maharashtra and the price has turned bearish in recent weeks on projections of a good crop this year.
The Centre, in its first advance estimates, has pegged soybean output at 14.22 million tonnes for 2016-17, higher than the targeted 13.61 MT. Last year, soybean production in the country stood at 8.59 MT. The projected increase in output is despite a marginal decline in acreage to 114.78 lakh ha this year from last year’s 116.29 lakh ha.
Further corrections expected
Soybean is ruling between INR 2500-2800 a quintal in terminal market Indore, against INR 3200- 3400 in mid-September, as market arrivals have begun to increase. “Indian soymeal prices are still higher by 5-10 per cent and that needs a correction to make our exports viable. A further correction in soybean prices is expected and we can see that only in the second half of October when the market arrivals are set to increase,” said Davish Jain, Chairman, Soyabean Processors Association of India.
He said crushing of beans in the new season has begun and is expected to gain pace in November, when more processing units are expected to be operational. New export contracts are likely to happen later this month and shipments will commence from November, he added.
Jain, who recently led an industry delegation to markets such as Thailand, Japan, Philippines and Vietnam, is optimistic that India will regain its market share in these countries this year with a good crop in sight. “We want to regain the lost ground in these markets. I think we have succeeded in communicating to our buyers in these countries that we are back in business and we are the only producer of non-GM soybean,” he added.
For India, where the harvest has already commenced, the soymeal export window is open till March, when the new Brazilian crop arrives, Jain said.
High domestic prices in the last two years had out-priced Indian soymeal in the international market. As a result buyers of Indian meal shifted to other origins and exports fell sharply from around 2.78 MT in 2013-14 to 6.69 lakh tonnes in 2014-15.
In 2015-16, Indian soymeal exports fell further, to 70,820 tonnes. April-August exports this fiscal were estimated at 10,145 tonnes, against 35,857 tonnes in the year-ago period, by the Solvent Extractors Association.
Source : Business Line