Soya Prices are Bullish, but May Drop at Any Time

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Soya Prices are Bullish, but May Drop at Any Time

Soya milk - a healthy drink
Soya milk - a healthy drink | Source
Soya Prices are Bullish, but May Drop at Any Time
Soya Prices are Bullish, but May Drop at Any Time | Source

Soya Prices are Bullish, but May Drop at Any Time


Soya prices edging up

In the Chicago Board of Trade, the price of soya bean futures has been edging up. The soya market has been witnessing hectic activity due to the concern about dry weather that is prevailing in South America. Dry weather is a very helpful factor for the cultivation of soya bean. The January contract is likely to rise to around $11.50 a bushel. In India, soya refined oil is selling spot at Rs.635 for 10 kg. With the value of Indian rupee falling against the dollar, the price of soya oil and soya bean is expected to rise in the coming weeks. Madhya Pradesh is the largest producer of soya bean in India and the Indore market rates are watched carefully by soya sellers and buyers. Maharashtra and Gujarat are the largest soya bean consuming states in India in the western coast.

Foul smell drives away vegetarians from soya

Ruchi Soya is the largest soya company in India. Soya bean contains a very large share of proteins and is good for health. However, a foul smell coming from soya drives away the vegetarians in India from consuming soya. Ruchi Soya researched and found a method to remove or hide this foul smell. Even after this, soya has not gained any popularity in other states in India.

USA is the largest producer of soya in the world

China’s import of soya in January may cross 5 million tonnes. China’s imports of soya during December are estimated at 5.4 million tonnes for December and 5.7 million tonnes for the month of November. China’s imports of soya cooking oil in December are estimated at around 700000 tonnes. Brazil’s soya crop cultivation is expected to be around 71.3 million tonnes next year. Last month it was estimated that Brazil’s production will be around 73 million tonnes. Now the forecast has trimmed the output. Brazil is world’s second largest producer of soya bean next to USA. Last year Brazil produced 75.3 million tonnes.

China’s clever business technique

India has contracted to export 700000 tonnes of soya meal which is used as an animal feed in the last two months. Indian domestic oilseeds harvests are gathering speed. The delivery is between December and January. Price contracted is at an average of $340 per tonne on fob basis. The exports are mainly to South East Asia. China was once upon a time large exporter of soya. But it suddenly stopped exporting soya. Everybody thought that there was a harvest failure in China. Later on, it emerged that China was using its domestic production of soya to feed its poultry and exporting poultry products for value added gains in the international markets. It is a business technique which India should follow. Instead of exporting iron ore to other countries, India should produce steel and export it to other countries for value added gains.

Buyers prefer South American soya over US’

Today, China is a net importer of soya bean. Its import of soya bean has fallen this year for the first time since 2004. Shipments this year are estimated to be around 51 million tonnes, down from 54.8 million tonnes last year. China is the largest importer of soya bean in the world. Soya bean has been outperforming corn in the world markets. US soya bean market is facing competition from South America. US export of soya bean has declined by around 20% in September and October as compared to the corresponding period of the previous year. Buyers preferred to buy soya bean from South America. USA is the world’s second largest exporter of soya bean next to Brazil.

Soya yield can improve in India through technology

India exports around 5.5 million tonnes of soya meal to Vietnam, Japan, South Korea, China and other South East Asian nations. Even though soya prices are bullish right now in the international markets, analysts also feel that slack Chinese demand coupled with higher US inventories may crush the crop price. After all, if the supply is higher than demand, then the price has to come down at least temporarily. All India Convention on Oilseeds, Oil Trade & Industry has urged the need for raising soya bean yield in India from the current level through technological upgradation and modern farm methods. If this is done, then India’s dependence on soya oil will be reduced. India imports more palm oil than soya oil. India accounts for nearly 45% imports of world palm oil.

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