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Informist, Monday, Apr. 28, 2025

 

By Anjali Lavania

 

MUMBAI – Prices of key oilseeds soybean, mustard seed, and groundnut are under pressure across major markets, weighed down by abundant arrivals, sluggish domestic and international demand, and tepid domestic buying. While there have been occasional rebounds mainly because of short bursts of a rise in demand or hopes of government procurement, traders, analysts, and experts say the broader sentiment remains bearish.

 

Across key markets, prices are reacting more to oversupply and weak buyer sentiment than to any recovery cues, with each oilseed facing its own set of challenge. The rise in production this year and reduced crushing demand with high imports of edible oil are affecting prices of these oilseeds, especially of soybean and groundnut, said Rahul Chauhan, director of iGrain India.

 

SOYMEAL PRICED OUT

"The soybean market is meal-driven," said a commodity analyst from a multinational food and agriculture company, who spoke on condition of anonymity. "With cheaper distiller's dried grains with solubles coming in, soymeal is being replaced." Currently, prices of corn distiller's dried grains with solubles are at INR 19 per kg, while soymeal prices are seen at INR 33 per kg, the analyst pointed out.

 

Distiller's dried grains with solubles is a byproduct of the production of ethanol. Grains like corn, wheat, or rice are fermented and distilled to make alcohol. The leftover material, rich in protein, is dried and used as feed for livestock and poultry.

 

With soybean arrivals increasing in the domestic markets due to sales by the government, and the growing presence of cheaper alternatives and high soyoil imports, prices are being depressed, said Narendra Porwal, a trader from Madhya Pradesh. Higher imports of soyoil are leading to reduced buying of domestic soybean by millers, he added.

 

According to data released by The Solvent Extractors' Association of India, crude soyoil imports in March increased to 355,358 tonnes from 218,604 tonnes a year ago. Crude soyoil imports during Nov-Mar rose to 1.91 million tonnes from 882,943 tonnes in the same period last year.

 

In Indore, Madhya Pradesh, weekly soybean prices dropped by 0.3% to around 4,519.60 per 100 kg as of Friday, said Indrajit Paul, research head at Agrocorp International. A modest uptick in the second week of April­­, when prices rose to about INR 4,364 per 100 kg in Indore, could be attributed to slightly improved demand during the wedding season, according to Tilok Chaged, a local trader. However, this did not last long.

 

Soybean production is estimated to have hit 15.13 million tonnes in the crop year 2024-25 (Jul-Jun), up 2.07 million tonnes from the previous year's 13.06 million tonnes, as per data shared by Chauhan.

 

SLUGGISH EXPORTS

Mustard seed prices, too, have been under pressure, with large arrivals in March and early April flooding the market. Sluggish exports are also depressing prices. The trend is expected to continue into May.

 

India exported 1.87 million tonnes of rapeseed meal in Apr-Mar, lower than 2.21 million tonnes a year ago. "The rapeseed meal export plummeted due to lack of demand from destinations," SEA said in its monthly release.

 

"Although procurement of the new mustard crop is giving some support to prices, improvement is still happening at a slow pace," said Mahesh Sameriya, a trader from Rajasthan. As of Apr. 21, the National Agricultural Cooperative Marketing Federation of India had procured 179,883.1 tonnes of mustard from Assam, Haryana, Madhya Pradesh, Rajasthan, Uttar Pradesh, Gujarat, and Chhattisgarh at the minimum support price of INR 5,950 per 100 kg. The government aims to procure 1.50 million tonnes in the rabi marketing season 2025-26 (Apr-Mar).

 

According to Paul, weekly mustard prices were up 0.4% at 6,324.85 per 100 kg as of Friday. During the second week of April, mustard seed prices hovered between INR 6,425 and INR 6,450 per 100 kg, with a slight increase of INR 25-INR 75 per 100 kg, according to traders. "This increase was supported by improved domestic demand. Looking ahead, growing Chinese demand for Indian mustard meal could lend further support to prices in the medium term," said Paul.

 

"If China relaxes the existing stringent conditions on the import of Indian rapeseed meal, India could become a key supplier and meet a substantial portion of China's demand," SEA said in its monthly report. The commodity analyst added that during Jun-Jul, when arrivals will be fewer, prices may rise by up to INR 200 per 100 kg. SEA sees the country's mustard seed production in Oct-Mar at 11.52 million tonnes. In the year-ago period, India's mustard seed production had hit an all-time high of 11.58 million tonnes.

 

POOR QUALITY NUTS

Groundnut prices in most local markets in Gujarat remained mostly flat at about INR 5,176.55 per 100 kg as of Friday, Paul said. In the second week of April, groundnut prices had shown limited upward movement, reaching INR 5,282 per 100 kg, a rise of just 3% from the previous month, while remaining below the minimum support price of INR 6,783 per 100 kg, he pointed out.

 

"Despite the uptick, overall market sentiment remains bearish," Paul said. "Most of the good-quality produce has already been absorbed through government procurement, leaving behind lower-quality stock with limited buyer interest." Although some improvement is seen in export demand recently, groundnut prices have not improved much. Huge production with higher summer groundnut sowing this year as compared to last year may push prices down further, he said.

 

Groundnut production is seen at 27.63 million tonnes in 2024-25 (Jul-Jun), an increase of 1.76 million tonnes from 2023-24.

 

OUTLOOK

"Soybean prices are expected to trade flat in the range of INR 4,500-INR 4,550 per 100 kg in the near-to-medium term," said Paul. "Mustard prices are likely to trade bullish in the medium-to-long term. Once prices cross the level of INR 6,440 per 100 kg, they may touch INR 6,700-INR 6,800 per 100 kg. Groundnut prices are expected to trade flat in the range of INR 5,150-INR 5,250 per 100 kg in the near-to-medium term."

 

As the rabi marketing season progresses, market participants are keeping a keen eye on the government's moves, export cues, import duty changes, and domestic demand signals. While procurement and short-term demand have provided momentary support, the broader outlook remains cautious. Unless there is a significant uptick in export demand, prices are expected to stay soft—trapped between heavy supplies and a lacklustre consumption trend.  End

 

Edited by Rajeev Pai

 

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