Increased exports, inventory piling by farmers support soybean prices
Soybean, which experienced huge price declines with falling commodity prices, is showing resilience since November in domestic market
By Devangi Joshi, ET Online |
MUMBAI: Soybean, which experienced huge price declines with falling commodity prices, is showing resilience since November in domestic market. Currently January future on NCDEX (National Commodity and Derivatives Exchange) is trading at Rs. 1,970 per quintal, up 28 per cent from its November low of Rs. 1,553.
Rising exports of soybean meal, the crushed product for which 80-90 per cent of total crop is used, is a major support factor. On the other hand, farmers, stressed with lower prices compared to last year, are also heaping up stocks to get advantage of better market conditions in the future.
According to data released by Indore based Soybean Processors' Association, exports of soymeal increased by nearly 8 per cent in last two months to 7,56,000 tonnes, compared to Oct-Nov 2007.
According to Rajesh Agarwal, coordinator, SOPA, exports are expected to reach 6,00,000 tonnes in December, taking yearly exports to nearly 5.5 million tonnes, higher than 2007-08 exports of 4.9 million tonnes.
Domestic prices are also supported by farmers holding on to their stock and making sells according to their requirements.
According to Mehul Agarwal, research analyst, Sharekhan Commodities, ���While domestic prices move in tandem with International prices, in last few weeks, they also have gained support from farmers' reluctance to sell at current market prices, which even after showing a rebound from November are nearly 30% lower than last year���.
Prices could extend their gains for January future to find a resistance varying in Rs 2,010-2,040 while Rs 1,910-1,880 is the key support range.
Besides low selling by farmers and stockiest, rising demand for soymeal from Southeast Asian countries have added support to the price. Vietnam, the biggest buyer from India, contributed to more than 30 per cent of total Indian exports in last two months.
Meanwhile, international soybean prices are also supported by concerns over South American crop due to prevailing hot climate with very little rains.
Rising exports of soybean meal, the crushed product for which 80-90 per cent of total crop is used, is a major support factor. On the other hand, farmers, stressed with lower prices compared to last year, are also heaping up stocks to get advantage of better market conditions in the future.
According to data released by Indore based Soybean Processors' Association, exports of soymeal increased by nearly 8 per cent in last two months to 7,56,000 tonnes, compared to Oct-Nov 2007.
According to Rajesh Agarwal, coordinator, SOPA, exports are expected to reach 6,00,000 tonnes in December, taking yearly exports to nearly 5.5 million tonnes, higher than 2007-08 exports of 4.9 million tonnes.
Domestic prices are also supported by farmers holding on to their stock and making sells according to their requirements.
According to Mehul Agarwal, research analyst, Sharekhan Commodities, ���While domestic prices move in tandem with International prices, in last few weeks, they also have gained support from farmers' reluctance to sell at current market prices, which even after showing a rebound from November are nearly 30% lower than last year���.
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Prices could extend their gains for January future to find a resistance varying in Rs 2,010-2,040 while Rs 1,910-1,880 is the key support range.
Besides low selling by farmers and stockiest, rising demand for soymeal from Southeast Asian countries have added support to the price. Vietnam, the biggest buyer from India, contributed to more than 30 per cent of total Indian exports in last two months.
Meanwhile, international soybean prices are also supported by concerns over South American crop due to prevailing hot climate with very little rains.
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