India imposes stock holding limits on soymeal till June 2022 to tame prices
The Central government on Thursday imposed stock holding limits on soymeal in a bid to control its prices, announcing the move days after restricting futures trading of some agriculture commodities and extending the deadline for free pulses import till March 2022.
A circular issued by the Department of Consumer Affairs, Food and Public Distribution said that soymeal millers, processors or plants can hold stocks only up to their 90 days of production. Traders and trading companies can hold only up to 160 tonnes of soymeal with a defined and declared storage location. The stock holding limits will be in place till June 30, 2022.
Soymeal is derived from crushing soybeans and it is the main ingredient of poultry feed meal. Indian soymeal is in high demand in world markets, for it is produced from non-genetically modified sources.
Traders said that by crushing soybeans, it gives 80 per cent of the meal and less than 20 per oil. Soymeal rates have jumped sharply in the domestic market due to strong demand from the overseas markets and rise in soybeans rates.
Between April and August 2021, this year, soymeal rates had jumped by over 60 per cent triggering calls from the user industry namely the poultry sector for allowing free imports to tide over the shortage.
Following this, the Centre first allowed import of 1.2 million tonnes of genetically modified soymeal.
However, till December, only around 0.8 million has been imported.
Despite the imports, soymeal prices in the domestic markets continued to rule higher and as on December 17, prices were almost 61 per cent more than the same period last year.
Meanwhile, prices of soybeans had also jumped by over 70 markets in the key markets due to general bullishness in the entire edible oil complex and also strong demand.
Speculative activity in the futures markets in the entire soybean complex and also stock holding by traders was blamed for the sharp rise in prices.
On the production front, production of soybean according to the first advance estimate of 2021-22 kharif crop released by the ministry of agriculture, is expected to be 12.72 million tonnes, which is marginally lower than the 12.89 million tonnes produced last year.
The Soybean Processors Association of India (SOPA) recently said the poultry industry’s latest soymeal consumption figures are highly inflated.
SOPA said that the rise in soybean prices is not in the hands of the processors and it is not because of anything done by the processing industry and they have already flagged the issue of hoarding and undue speculation of soybean futures.
“Farmers cannot be forced to sell soybean at MSP as desired by the poultry industry. Soybean farmers have as much right to livelihood and get remunerative prices as poultry farmers,” SOPA said.
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