India’s Soyabean Market: Procurement Struggles and Price Uncertainty

Current Affairs National

Posted by newadmin on 2025-02-28 08:46:05 |

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In recent months, the Indian soyabean market has faced persistent challenges despite government interventions. The central government has procured 20 lakh tonnes of soyabean, yet wholesale prices have remained stagnant, raising concerns about the effectiveness of procurement strategies and market dynamics.

The government had set an ambitious procurement target of 30 lakh tonnes, but as of February 2025, only 14.71 lakh tonnes had been successfully procured. The process involves sub-agents purchasing directly from farmers and ensuring immediate payments to their accounts. However, despite these efforts, the expected rise in soyabean prices has not materialized.

Soyabean is primarily harvested in September, and its marketing season runs from September to October. This year, prices have consistently remained below the Minimum Support Price (MSP) of Rs 4,892 per quintal. The average price dropped from Rs 5,220 in September to Rs 4,511 in November, with a slight recovery to Rs 4,872 in December. Despite this increase, prices remain unstable, and market confidence is low.

In Maharashtra’s Latur wholesale market, prices have been unexpectedly low. During November and December, the price per quintal hovered around Rs 4,200, signaling a disconnect between government procurement and actual market trends. Traders are skeptical that prices will recover soon, particularly with government stocks still influencing supply dynamics.

Soyameal, a key byproduct of soyabean processing, plays a significant role in Indian exports. At present, Indian soyameal is priced at $380 per tonne, slightly higher than Argentina’s $360 per tonne. Although traders acknowledge the importance of exports, many doubt that increasing exports alone will stabilize domestic soyabean prices. Some suggest that government subsidies could improve export competitiveness, while others fear that prices may fall further once government stockpiles are released into the market.

Looking ahead, analysts predict that a substantial price correction is unlikely until the government depletes its 20 lakh tonnes of soyabean stock. One proposed solution is to include soyabean in the public distribution system, which could help stabilize prices by increasing domestic demand for soyabean as a protein source.

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