“The government has now decided to extend it (control order) till September 30, 2016. This would enable the state governments to take appropriate steps to ensure supply of these essential food items without any problem,” Union communications and information technology minister Ravi Shankar Prasad told mediapersons after the cabinet meeting.
Soyabean production in the country is expected to be nortmal this year at 10.7 million tonne after it touched a record high of 11.9 million tonne in 2013-14.
The monsoon has been favourable for the crop in Madhya Pradesh, Rajasthan and Gujarat, major producers of the commodity. On average, Madhya Pradesh produces 74 per cent of India’s total soya bean crop and Rajasthan, 10 per cent.
The stock levels too are high because of lower crushing in the previous year. As for consumption, Chinese imports have been influencing prices. A sluggish economy and lower imports by China have affected most commodity counters.
Meanwhile, Union agriculture minister Radha Mohan Singh last week said the end-season revival of the monsoon across north, east, west and central regions would help rabi crops planting and production to register an increase over the last year.
The agriculture department last Monday had indicated that import duty on edible oil needs to be hiked further. The government has raised the import duty on crude edible oils to 12.5 per cent from 7.5 per cent and refined edible oils to 20 per cent from 15 per cent, leaving a gap between the two intact at 7.5 per cent.
India’s soyabean oil consumption on an average is 3 million tonne, with domestic supply meeting half the demand. Consumption is expected to grow 3-4 per cent on average every year. Commodity analysts felt that rising consumption, at a time when production is not able to keep pace with demand, will lead to higher imports in the coming year.
According to the latest report by Emkay Commodity Research, the October refined soyabean oil futures at the National Commodity & Derivatives Exchange (NCDEX) traded strongly positive on concerns of crop damage, festival-led demand, prospect of more hike in import duty of edible oils and tracking bullish signals from the Chicago Board of Trade (CBOT). CBOT prices had jumped amid improved demand. Positivity in palm oil has also supported soyabean oil prices. Also, the ongoing festive season has provided firm undertone to the market. “Prices look to trade upside on expectation of a further hike in the import duty of edible oils, festive season-led demand and tracking bullish signals from global counterpart while the extent of upside may be restricted on record high imports,” the report said.
Soyabean oil prices in India are influenced by global edible oil prices as well. Rabobank Agri Commodities report said, “Our price forecast for soyabean oil remains bearish from current levels, but is slightly higher for soya-bean meal. The factors influencing soyabean oil prices at this point, are:
*US soybean oil stocks are rebuilding faster than anticipated,
*Basis values for soya bean oil and canola are not reflecting tight supplies, and
*Global demand for soymeal remains strong, but the US market share will decline, partially due to changes in currency values.”
“The USDA’s (US department of agriculture) higher than expected soyabean yields and production estimates for the US in 2015-16 pressured soya products following the August crop report. However, we see upside for soyameal futures on robust demand. Our soyabean oil price forecast for the third quarter has been lowered by USc 1.50/lb to USc 30/lb, while Q4 and Q1 prices were shaved just USc 0.50/lb to USc 30/lb. We are looking for relatively steady soyabean oil futures prices over the next 12-month period,” the Rabobank report said.