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Soyabean futures fall on rumours about soyameal imports

Soyabean futures fall on rumours about soyameal imports

11 Aug 2021

PUNE: Soyabean prices fell in futures trade on the NCDEX on Tuesday–the third consecutive day of fall–on rumours that the government may soon allow import of genetically modified soyameal.

The soyabean September contract hit the lower circuit on Tuesday morning, with trade closing at Rs 7,618/quintal as the market believes that the country may import soyameal.

On Monday, trading of the September contract had closed at Rs 8,104/quintal. On Tuesday, the contract again hit the lower circuit in early trade. The contract had its high of Rs 9,544/quintal on August 2, which made it tough for the poultry industry to operate.

Soyameal, a by-product of crushing of soyabean seeds, is used as the main protein source in poultry and animal feed. The poultry industry had been seeking the government’s permission to import GM soyameal, which is cheaper and easily available in the international market.

However, there is no government notification about soyameal imports and, hence, a section of the trade has alleged this to be a planned rumour. Bahadur Ali, chairman of All India Poultry Breeders Association, had earlier said that “imports will be allowed under Chapter 23 of the Customs Rules exclusively for animal feed purposes”.

Ritesh Sahu, commodity analysts with SMC Research, said, “Soybean Sep contract on NCDEX hit the lower circuit for the third consecutive day on Tuesday to trade at Rs 7,618/quintal, mainly on reports that the government is likely to approve import of 15 lakh tonnes of soymeal for animal feed use.”

With the kharif harvest just two months away, there are concerns about the impact on farm gate prices. The Solvent Extractors’ Association (SEA), which had supported the poultry industry’s demand for import of soyameal, wants imports to be allowed for only a short period.

“Import of soyameal should be allowed only for a period of 3 months to tide over the crisis being faced by the poultry industry,” said BV Mehta, executive director, SEA. “There should be clarification about the period allowed for imports to take place.”

If soyameal import is allowed, then it can arrive in the country in 10 days, as neighbourng countries such as Bangladesh and Vietnam will be able to export it.

Demand for soybean is high because of its use as a meal, and its stocks are limited in the domestic market going into the next season. “New season soybean will arrive after the month of October. In India, farmers have sown soybean across 115 lakh ha, which is higher compared to normal sowing area, but behind last year’s area by 3 lakh hectares. If import is allowed, it will reduce the dependency on the domestic crushing of the seeds,” said Sahu.