Exporters of soybean forward deals were caught in crores

- Commodity Current: Jayavadan Gandhi

Nowadays, the lives of the common man have been affected by the skyrocketing prices of edible oils rather than higher petrol-diesel prices. Prices of most edible oils have risen by more than 50 per cent. The government is not ready to reduce the import duty despite the high prices of imported edible oils. Which is increasing the harassment of the people. In the case of edible oils, the prices of groundnut oil have gone up by 12 per cent, soybean oil by 4 per cent, palm oil by 3 per cent and sunflower oil by 3 per cent. India is not yet self-sufficient in edible oil production. In order to meet the domestic consumption of edible oils, edible oils still have to be imported in addition to 5%. Of the edible oils imported into the country, 51% are palm oil which is widely used in adulteration of other edible oils. In addition, 7 per cent soybean oil, 15 per cent sunflower oil, 3 per cent imma palmolin oil and 2 per cent other oils are imported. Global prices are also responsible for the rise in edible oil. The international market for palm oil, soybean and sunflower oils has been steadily rising since 2013. Globally, palm oil has gone up by 6 per cent, soybean oil by 3 per cent and sunflower oil by 104 per cent. Apart from this, the continuous increase in import duty is also responsible for the rise in edible oil prices. For instance, the import duty on crude palm oil in 2016 was 7.5 per cent. Jehal has 3%. On top of this, agricultural cess rate and social welfare tax are also levied in many cases. Similarly, import duty on soybean oil and sunflower oil has increased from 7.5 per cent in 2017 to 5 per cent. Oilseed commodities like soybean and Tata Rayda have been in the red for the past week. Eighty months ago, the soybean market was Rs 500 per quintal, which is now jumping to the surface of Rs 10,000. The boom is being supported by a severe shortage of soybean supply. Soybeans have risen 3% in the last one month or so. While in one year, the price has more than doubled by 115 per cent. Soybean support prices are now three times higher than Rs 50. The soybean supply from other countries, including Nepal, has been hit hard by short supply. As a result, prices of various food items made from soybean are also increasing.

The new soybean crop is still more than two months away from hitting the market. At this time, farmers, traders, oil millers have stocks of soybeans, so the red rice boom in soybeans is still calculated to continue. In such a scenario, soybean futures are still likely to rise to the level of Rs 1,200 to Rs 12,000. Due to high soybean prices, soybean is becoming a center of attraction for farmers. Compared to last year, the planting in the country has increased by 10 to 15 per cent. In Gujarat, soybean cultivation is significant in Saurashtra's Junagadh, Amreli, Rajkot as well as in districts connecting Madhya Pradesh and Rajasthan like Sabarkantha and Aravalli in North Gujarat. Farmers in Mehsana district have also started experimental planting of soybean. The soybean rally has given investors a positive return of over 3 per cent in the last one month. However, some of the soybean forward traders have suffered heavy losses. It is estimated that exporters have lost crores of rupees due to skyrocketing prices at the time of delivery after making forward deals in the range of Rs 500 to Rs 2,000 at lower prices. According to a section of exporters trapped in soybean forward deals, the loss is estimated at over Rs 100 crore to Rs 150 crore.

Soybean parallel rye is also steadily rising. Four months ago, the ryado has risen from around Rs 500 to almost Rs 200. Which is likely to rise further to the level of 500. However, soybean and rye plantings are expected to increase at the last minute due to high prices. Besides, guar is up 3% and guar gum is up 3%. Markets of other agricultural crops are also on the rise due to increasing demand due to festivals against the shortage of income of agricultural crops in the monsoon markets.