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Informist, Thursday, Sep 12, 2024

 

By Anjali Lavania

 

MUMBAI – The central government's approval to Madhya Pradesh's proposal to purchase soybean at the minimum support price of 4,892 rupees per 100 kg has left a section of farmers unsatisfied. These farmers have sought a higher price of 6,000 rupees per 100 kg to make good the losses incurred in the last few months because of falling prices.

 

In some districts of Madhya Pradesh, prices have fallen to a decade low of 3,500-4,500 rupees per 100 kg. The drop in prices comes just ahead of the start of new-crop arrivals at mandis.

 

Currently, soybean prices in the state's Ratlam mandi are in the range of 3,500-3,700 rupees per 100 kg, said Narendra Porwal, a Ratlam-based farmer. "Farmers stored bulk of soybean in anticipation of a rise in prices in future, but due to cheaper soyoil imports at low duty, deteriorated quality of seeds because of bad weather and diseases, prices fell, leaving them discouraged," Porwal said. At these price levels, farmers are incurring a loss of 1,000-1,500 rupees per 100 kg, he said.

 

"Farmers of Ratlam, Ujjain, Dhar, and Dewas have written to the state government about the issue. Prices should be near 6,000 rupees per 100 kg so that farmers get profitable returns," Porwal said.  

 

The drop in soybean prices is due to various factors. Apart from heavy rainfall, the soybean crop in some districts such as Ratlam, Neemuch, Dhar, Dewas, and Khargone have been hit by the 'yellow mosaic' disease, which turns soybean plants yellow, and leaves red and brown spots on the leaves. If not checked in time, it can lead to serious damage to the crop.

 

"The yellow mosaic disease has severely affected soybean crops in some districts of Madhya Pradesh, leading to reduced yields and quality, and has caused stunted growth which may result in shrivelled grains in the future," said Amit Gupta, research analyst at Kedia Advisory. This, he said, had led to a drop in prices. 

 

Soybean prices in most parts of Madhya Pradesh have been falling since November, when they stood at 5,500 rupees per 100 kg. Although a recovery was seen, it was short-lived, and prices have falen consistently since August, experts said.

 

"In early September, soybean prices in Madhya Pradesh mandis averaged 4,423 rupees per 100 kg, resulting in farmer losses of over 220 mln rupees due to lower-than-MSP prices," Kedia Advisory said in a report.

 

The government will start buying soybean at the minimum support price in the next couple of weeks, as market rates have fallen below the support price, according to media reports. "Madhya Pradesh government announced that it will buy 2.7 mln tn of soybean from Oct 21 to Jan 18," said Indrajit Paul, head of research at Agrocorp International.

 

The Centre has approved a total procurement of 1.56 mln tn of soybean, with Maharashtra contributing 1.3 mln tn, Karnataka 100,000 tn, and Telangana 50,000 tn, as per media reports. The National Agricultural Cooperative Marketing Federation and the National Cooperative Consumers' Federation of India will procure the oilseed from farmers under the price support scheme. 

 

Today, soybean prices in the benchmark market of Indore were up 50 rupees at 4,380-4,600 rupees per 100 kg, according to Mukesh Mangal, a local trader. Arrivals were down 700 bags at 1,800 bags (1 bag = 90 kg).

 

The exact figures for soybean arrivals will depend on the final harvest output and crop conditions. Typically, arrivals peak from October to December, but recent crop damage may influence the number of arrivals as well as the prolonged withdrawal of the current monsoon might delay the harvest by some days," Gupta said.

 

Market participants say soybean prices are not expected to rise in the near term. "A price rise could occur only after the harvest season, likely from late 2024 to early 2025, amid expected disruption in the global market supply chain, increased demand from China, widespread flood situations in Brazil and reduction of crop size in Argentina and the US," Gupta said. 

 

"I believe what farmers need right now is assurance of a guaranteed price, so that price volatility due to weather changes and plant diseases do not affect them much," said Devinder Sharma, an agriculture expert. If prices continue to slump, there will be a drop in the soybean area next year, he added. 

 

If farmers in Madhya Pradesh are somewhat sceptical about the effectiveness of government procurement, it is partly because of the limited reach of buying agencies in the state – the buying machinery of these agencies is known to be better in states in north India than in others.  End

 

Edited by Avishek Dutta

 

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