Soybean prices and its derivatives have more than doubled owing to lower availability and gradual unlocking of the economy. Unlocking of the economy have caused the restaurant and small street vendors operations to revive supporting demand.
o Improved demand from crushing plants due to lower import of soyoil.
o Improved export demand for soymeal
o Lower quality crop of soybean in 2020 due to rains during the maturity and harvesting period.
o Current year lower acreage of kharif soybean so far in the key states of Madhya Pradesh and Rajasthan.
o Lower acreage of Coarse cereals in 2021 is also supporting price sentiments.
o Substitute products such as corn, bajra, pulses churi, broken rice also increased
o Global shortage of soybean and other feed stock such as corn on account of weather concerns in the US and Argentina. South-Asian demand shifting to India.
o China’s rebounding livestock industry specifically its swine industry triggering surge in global demand for the oilseed and grains.
Potential Remedy –
ü, Allow duty-free import of oilseeds into the country under quota system and for a stipulated duration.
ü Impose a balanced stock-limit on oilseeds as sowing is complete of soybean
ü Reduce duty on soybean oil