Hoping for high prices, farmers hold on to soya produce

PUNE: Soya bean farmers are holding on to their produce because prices, though higher than the minimum support price, are less than their expectations. But processors think farmers will have no option but to sell their stocks sooner or later.

Supplies to Madhya Pradesh and Maharashtra markets are much below the normal at this time of the year.

Soya bean prices had touched Rs 5,000 per quintal last year. Prices in different markets are in the range of Rs 2,700 per quintal to Rs 3,200 per quintal. Farmers' expectations have increased because of a drought in the United States.

Some APMCs have made arrangements for the storage of soya bean and are giving pledge loans to farmers against the stored produce. Millers think farmers will not be able to hold their stocks for long as the carrying costs are high.

"Considering this, farmers' expectations of better prices do not seem to be rational. This season's soya crop in India is expected to be the biggest ever. Farmers will bring the bean to the market sooner or later. Possibly, oil crushing and refining plants will streamline their sales based on seed purchases," said Dinesh Sharma, managing director, Ruchi Soya Industries.

India being the cheapest source of soya bean meal, good demand is likely to prevail and may stabilise the bean price. "Demand for soya bean meal from neighbouring countries and local users is expected to continue and may partly offset the incremental supplies of beans during the current year," said Sharma.

Soya bean prices increased by about Rs 200 per quintal last week due to international support, coupled with heavy buying by processors who have just started their plants.

" Soya bean prices may correct downward after the immediate need of the processors is met," said Rajesh Agrawal, spokesperson and co-ordinator, SOPA. According to the estimate of Soya bean Processors Association of India (SOPA), production is expected to increase by about 9% from 116.5 lakh tonnes in kharif 2011 to about 127 lakh tonnes in kharif 2012.