The MSP of soybean has been fixed at Rs 2,775 per quintal with a bonus of Rs 100 per quintal. Pathak said that soybean prices in the local market are down due to higher production at a domestic and international level.
With soybean prices falling below MSP in key growing regions, industry experts see some shift in cropping patterns in the coming Kharif season. Farmers may either opt for cotton, castor and even groundnut in some states, top officials of the Solvent Extractors Association of India (SEA) said. “It will be interesting to see how cropping plays out the coming season. Since farmers burnt their fingers in pulse production last season, they have little option but to continue with soya this season.
“However, in Maharashtra where there are issues with tur procurement, cotton seems a more attractive option over soya,” said B V Mehta, executive director, SEA. Cotton prices have remained firm throughout the 2016-17 season and this factor could lead farmers to plant more cotton this Kharif as well, he said. In Gujarat depending on the monsoon, farmers could either go for castor or groundnut. Castor prices have been high but farmers can plant only one crop leaving the land occupied for a long period.
While farmers in north Gujarat may opt for castor and groundnuts could be an attractive option for farmers in irrigated areas, he pointed out. The association has cut its soymeal export forecast by 25% from its previous outlook as an appreciating rupee and a correction in global prices make Indian supplies uncompetitive.
Mehta also says that the country may export 15 lakh tonnes of soymeal during the 2016-17 marketing year that runs from October to September. “Lower shipments from India will help South American countries like Brazil and Argentina to increase soymeal sales to Asian buyers like Vietnam, Thailand, Japan and Indonesia. This may prompt farmers to cut soybean cultivation and shift to other crops like cotton in the upcoming sowing season. Due to the strengthening of the rupee, we are currently outpriced. Moreover, global prices are coming down due to weakening of Brazilian real,” he said.
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India may produce 106 lakh tonnes of soybeans in 2016-17, up 47 % from a year ago, he said. Soymeal prices in India have risen nearly 10% in the past three months to $390 per tonne on a free-on-board (FOB) basis, while global prices dropped 8% to $307 during the same period.
At the beginning of the season, the SEA was expecting shipments of 2 million tonnes during the 2016-17 marketing year because of higher soybean output. According to D N Pathak, executive director, Soybean Processors Association of India (SOPA), some shift to cotton is likely since soybean prices are low. Last season, the country cultivated soybean on 110 lakh hectares with total production touching 115 lakh tonnes. It will be difficult to predict exactly how much of a shift is possible since it largely depends on the monsoon.