The rise in price of soybean–an agri-commodity used to produce oil and animal feed–has resulted in soybean oil becoming costlier than mustard oil for the first time since 2008, when the global commodity markets had witnessed a sharp rally.
The retail price of mustard oil is Rs 155 per litre while soybean oil available for Rs 170 a litre–a difference of nearly 10%. Traders said this has prompted many of those living in north India to shift to mustard oil from soybean oil.
Soybean was trading at Rs 7,170 per quintal on Thursday on NCDEX for April 20 delivery. The price is 83% higher than the minimum support price of Rs 3,880 per quintal fixed by the government.
“We have sought the intervention of Sebi and NCDEX, as fundamentally there is no mismatch in demand supply situation in the country. The speculators are artificially rigging the prices,” DN Pathak, executive director of Soybean Processors Association of India (SOPA), told ET.
According to SOPA figures, arrivals from October 2020 to March 2021 stood at 74.75 lakh tonnes. About 58.50 lakh tonnes of soyabean have been crushed to produce oil, while 1.15 lakh tonnes of soyabean have been used directly for seed purpose and exports have been to the tune of 0.42 lakh tonnes. SOPA said that stocks with plants, traders and farmers stood at 36.64 lakh tonnes as on March 1.
Soya meal, which is obtained after crushing soyabean, is used in animal feed. “High-protein soya meal is now selling at Rs 67 per kg, compared with around Rs 52 at the beginning of March. Soya meal has a 30% share in the feed composition. In March last year, soymeal was trading at Rs 30 a kg in the Indore market,” said Amit Saraogi, managing director of Anmol Feeds.
BV Mehta, executive director of the Solvent Extractors Association of India (SEA), said crushing of mustard seed has gone up because people are shifting to mustard oil as it has become cheaper than soyabean oil. “In this economic uncertainty, everybody is tightening his purse,” he said.
Mustard has an important stature in the group of Rabi oilseed crops in India and its production levels vis-a-vis other rabi oilseed crops determine the price flow of all oilseeds in the second half of the oil-year season.
Meanwhile, import of vegetable oils in March 2021 stood at 980,243 tonnes, up by 2.6% from 955,422 tonnes a year ago. The overall import of vegetable oils during November 2020 to March 2021 was reported at 5,375,003 tonnes compared with 5,519,213 tonnes–down by 2.6%.