The mandi prices of soybean, a key kharif oilseed crop, continue to rule below minimum support price (MSP) on account of robust harvest, despite the government agencies purchasing about one million tonne (MT) of oilseed variety under the price support scheme in six key growing states since October.
Trade sources told FE that the average mandi price of soybean on Friday was Rs 4300 /quintal against the MSP of Rs 4,892/quintal announced for the 2024-25 season (July-June) while the procurement by agencies such as Nafed and NCCF would continue to purchase operations under price support scheme (PSS) till January 15.
The glut in global supplies has hit domestic prices as a chunk of soybean, with only 18-20% oil content, is used as animal feed. The ex-factory (Indore) prices of soymeal, widely used in the poultry industry as a feed, declined to Rs 2950/quintal on Friday from Rs 4150/quintal prevailed at the beginning of the year.
“The government intervention has not helped improve price realisation by farmers due to the demand supply dynamics,” an official said. The agencies are purchasing soybean from the farmers in Madhya Pradesh, Maharashtra, Rajasthan, Karnataka, Gujarat and Telangana under the PSS of the agriculture ministry in the current kharif season. So far, the agencies have purchased oilseed variety from 4.12 lakh farmers in six states.
According to the Soybean Processors Association of India, the output of oilseed variety for the 2024-25 crop year is pegged at 12.58 MT, 6% higher than the previous year. The agriculture ministry in its first advance estimates, has estimated the output of kharif oilseed variety at 13.36 MT, marginally higher than the previous year.
In September, when mandi prices were below the MSP due to low import duties on edible oil, the agriculture ministry had approved the purchase of 3.22 MT of soybean from farmers in Madhya Pradesh (1.36 MT), Maharashtra (1.3 MT), Rajasthan (0.29 MT), Karnataka (0.1 MT), Gujarat (0.09 MT) and Telangana (0.05 MT) under PSS.
In the 2023 kharif season, agencies purchased 70,000 tonne of soybean from farmers at MSP.
Effective from September 14, the government raised import duties on crude palm, soybean, and sunflower oils to 27.5% from 5.5%, while duties on refined edible oil rose to 35.75% from 13.75% aimed at boosting domestic production as the country imports about 58% of its edible oil consumption of 24-25 MT.
In the last rabi season, despite having a record mustard production of 13.16 MT in 2023-24 crop year (July-June), the mandi prices were ruling below the MSP and the government agencies had purchased 1.2 MT of mustard from the farmers in key producing states of Haryana, Madhya Pradesh, Rajasthan and Uttar Pradesh.