Soya meal is a key constituent of poultry feed meal and its rates are directly connected to soybean prices because the seed has more than 80% meal and 18% oil content in them. This season, despite a good harvest, soya bean prices have soared almost 76% in the domestic market, benefitting farmers on one hand but hurting the poultry industry on the other. A week after restricting futures trading on some agriculture commodities and extending the deadline for duty-free pulse imports till March 2022, the Centre has now imposed stock-holding limits on soyameal, in a bid to control its prices. The stock holding limits will be in place till June 30, 2022.
In October 2020, soyabean futures were trading close to Rs 3,800 per quintal, which spiralled to a record Rs 10,680 per quintal in August 2021 on lower output and strong demand from the poultry industry. Following this, the Centre first allowed import of 12 lakh tonne of genetically modified soyameal till January 31, 2022. However, till December, only around 8 lakh tonne have been imported. Speculative activity in the futures markets in the entire soyabean complex and also stock holding by traders have also been blamed for the sharp rise in prices by industry people.
Soyabean production is estimated to be 127.2 lakh tonne in the 2021-22 season, as per the agriculture ministry’s first advance estimate of this year’s kharif crop production. The estimate is only marginally lower than the 128.9 lakh tonnes produced last year. Traders believe growers are holding stocks in anticipation of better prices in the near future, which is resulting in lower supplies in the market.
DN Pathak, executive director, Soybean Processors Association of India (Sopa), says: “Soy processors do not stock soy meal. They cannot afford to stock finished product at huge inventory carrying cost. Soymeal is not an item for long storage even by traders. How this will help in controlling prices is not clear.” Pathak felt that that this move may bring back the inspector and raid Raj, which can only have a negative impact.