MUMBAI (Commoditiescontrol) - Indore based soybean crushing industry body, the Soybean Processors Association of India (SOPA) has blame speculators and various other factors behind the current state of industry. Mired under low domestic meal prices and cheap imports the industry has to face with abundant availability of the commodity in local markets. Besides, falling exports of meal have further dented their operations.
In order to understand the current crisis the industry is suffering from and to initiate necessary steps the group met here on Friday, 1st May. Burning issue that topped the agenda was the current disparity in crushing margin. The body also discussed several other issues that included loss of exports and other problems faced by the industry.
In this meeting present were major soy processors from Madhya Pradesh and Maharashtra. They have identified main causes of the current problems of the soy industry that included heavy speculation and manipulation of prices in the futures market through NCDEX, markets being influenced unfounded rumors of lower crop size, bad weather and other unfavorable conditions resulting in unrealistic rise in prices.
Further, the tax evasion and other unhealthy practices being indulged in by a few unscrupulous companies and very low prices of soybean oil in the world market besides low landed price in India.
SOPA informed of re-asseing the crop size for soybean Kharif 2014 critically and blamed speculators for floating rumors of very low crop production estimates.
Earlier in November 2014, SOPA had estimated soybean production at 104 Lakh tonnes, which is now revised lower to 100 Lakh tonnes. However, the body has informed that there is no change in crop estimates for MP, Rajasthan and other States except for Maharashtra where the crop size is revised to 26 lakh tonnes.
With exports practically at an all time low, the soybean meal availability for domestic consumption is sufficient and there is a likelihood of carry over stock in the coming season, SOPA informed.
After the deliberation over several issues the industry body has decided to "vigorously" follow up with the Forward Market Commission (FMC) and other authorities to take effective steps and check market manipulation by speculators.
Some of the steps considered were making physical delivery mandatory of a certain percentage of the futures contract, increase the margin money and temporarily suspend soybean futures during the off-season when the speculation is at maximum.
SOPA will meet officials at the top level to put an end to the unhealthy speculation.
Meanwhile, the IMD weather forecast is positive for soybean cultivation in Kharif 2015 and it is expected that there will be good soybean production this year.
SOPA has decided to approach the Central Government once again requesting for increase import duty on soybean oil from current 7.5 per cent to 17.5 per cent. Looking at the world supply of soybean oil and prices, the increase in import duty will not have any adverse effect on the consumers, SOPA feels.
Finally, SOPA has maintained that soybean Processors will make all out efforts to raise the production and productivity of soybean in their respective areas with the help of Soybean Development Programme of SOPA and the state governments.
(By Commoditiescontrol Bureau; +91-22-61391533)
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