Soybean has been the major component of the oil seed crop for India. Of the total nine oilseed crops production it contributes to about 35.00 per cent. In recent times the stock management of soybean and enhanced demand is imposing serious challenge for the country owing to the prevalent economic crises in European Union and improving demand in the global markets. There is a need for an effective price and stock management strategy in order to achieve maximum advantage of the expected price hike.
India’s Soybean production in 2012-13 is estimated at around 127.32 lakh MT, up from around 122.14 lakh MT produced in 2011-12. India’s support prices in 2013-14 are hiked by about 14 per cent from the levels in 2012-13 with MSP of Rs. 2500 per quintal for black soybean and Rs. 2560 per quintal for yellow soybean. About 93.92 per cent of the total production in the country was contributed by 3 states. The top soybean producing states of the country are Madhya Pradesh (52.03 per cent), Maharashtra (32.63 per cent) and Rajasthan (9.26 per cent). India holds second position in the major soybean oil consumer’s list after China. The Indian government has imported 8.54 million MT of edible oil in the marketing year 2012-13 (October – September) out of which about 0.85 million MT was soybean oil.
Global soybean production is projected almost unchanged at a record 281.7 million MT as larger crop forecasts for Brazil and Paraguay mostly offset reductions for the United States, Canada, China, and Russia. Soybean production for US is 85.7 million MT, Brazil is forecasted to produce a record 88 million MT, up 3 million MT on increased area. Argentina is expected to reach 54 million MT and soybean production for China is reduced 0.3 million MT to 12.2 million MT, with lower yields resulting from excess rainfall and flooding in the northeast. If realized, this would be China’s smallest soybean harvest since 1992-93.
The soybean market price variation study indicates that the price volatility is on the rise since June 2010 owing to reports of higher seasonal demand. Looking at the price trends of the past years, the prices tend to decline during the June-Sep. period on increased hopes of higher oilseed sowings in Kharif and across northern hemisphere oilseed growing countries. The surge in demand starts towards end October and reaches peak by May. In 2012-13, the Indian Soybean prices have followed similar pattern from the current levels following increased demand from Chinese traders. The demand side is bullish. The USDA is forecasting a 4% increase in U.S. exports, but export commitments to date show that sales are ahead by 15.8%. The entire anticipated increase comes from China. The estimate for Chinese imports is 69 million MT, up 9.5 million MT, or 16 per cent from last year.
India’s soybean production for the crop year 2013-14 (July - June) is expected to reach around 104.50 Lakh MT. The expectation of a lower crop and increased export demand (over 10 million MT) is expected to keep the prices bullish with increased volatility.