The Soybean Processors Association of India (SOPA) has revised downwards the damage to soybean crop due to the recent rains. The body now expects the damage to be around 10 million tonne from 10.4 million tonne earlier.

SOPA blamed the futures market for underestimating the crop size, which it said has pushed up prices by 20% in a month. Soybean prices are trading around Rs 4,070 per quintal currently.

It said speculators in the futures market are quoting abnormally low figures, hurting the fortunes of processors and their margins.
 
The association also said that there is no change in crop estimates for MP, Rajasthan and other states except for Maharashtra where the crop size is revised to 26 lakh tonne.

"We are looking to protect the long term interest of processors, not just a few large ones. Heavy speculation and manipulation of prices in the futures market through NCDEX is hurting the entire trade. Futures influences market sentiments through unfounded rumours of lower crop size, bad weather and other unfavourable conditions resulting into unrealistic rise in prices which needs to be stopped," said Davish Jain, President, SOPA.

However, NCDEX clarified that, “Soybean futures contracts on the exchange platform have attracted wide and active participation from all segments of the value chain participants including manufacturers and exporters. The exchange is constantly monitoring the trading on its platform and shall take appropriate action in case any irregularities are noticed.”

The exchange further said, “The futures prices are based on underlying fundamental factors. Recent price movement in the futures prices for soya complex appear to be in response to recent developments in the demand-supply dynamics”.

SOPA said that heavy speculation, tax evasion by a few unscrupulous companies and very low prices of soybean oil in the world market and historically low landed price in India are hurting business of soybeen processors.

The body has suggested making physical delivery mandatory for a certain percentage of the futures contract, increasing the margin money and temporarily suspending soybean futures during the off-season when the speculation is at its peak.

Jain said that, SOPA will again approach the Central government to increase import duty on soybean oil from current 7.5% to 17.5% because there is a likelihood of carry over stock in the coming season”.

Source:business-standard.com