Bean prices have rebounded after falling below minimum support prices in November, tracking the rise in meal prices and supported by state government purchases of soybeans.

"Soybean prices may rise further as processing plants are getting good prices for soymeal and the upward trend is still continuing," said trader Prakash Vohra.

Soybean in central Indian markets is trading between Rs 8,600-9,100 a tonne against 8,100-8,400 a fortnight ago.

Bean prices in Madhya Pradesh fell to Rs 7,300-7,400 last year, against the government's guaranteed procurement price of 8,450.

The central state of Madhya Pradesh is soybean bowl and accounts for more than 75 per cent of the country's annual soybean output of six million tonnes.

"Soymeal prices are very bullish on strong export demand. Added to this is the limited soybean arrivals which has increased bean prices," said one trader at a multinational commodity trading firm.

Traders said soymeal prices had risen to $177-178 per tonne FAS (free alongside ship) at West coast ports from $164-165 a week ago and $157-158 two weeks ago.

Officials said last year state procurement agencies would start crushing soybeans bought from farmers to reduce rising stocks.

Traders, however, said they believed that the government had not yet begun to crush any of its soybeans.

Limited supplies are another factor pushing up bean prices.

"Market arrivals are limited, but demand for soybeans has increased in the last few weeks," said trader Rajesh Ajmera.

"Increased demand from processing plants has pushed up bean prices by Rs 600-700 a tonne in the last week," he said.

Traders said farmers were holding back bean supplies due to the surge in bean prices with soybean arrivals falling to 7,000 tonnes per day from 13,000 tonnes a fortnight ago, traders said.

"The rally in prices has led farmers to believe that there is further scope for higher prices," said C Raghavan, vice-president at R Velgi & Sons, a commodity trading firm.