The Solvent Extractors’ Association of India (SEA) has urged the Center to procure soybeans at the Minimum Support Price (MSP) and build buffer stocks.
At a recent meeting of agriculture sector stakeholders with Union Agriculture Minister Shivraj Singh Chouhan, the SEA explained to the minister the need for the government to procure and store soybeans at MSP.
In his monthly letter to SEA members on Monday, SEA President Sanjeev Asthana said soybean farmers are facing significant hardship as the current market price is much lower than the MSP, forcing them to sell it at around ₹4,250 per quintal .
Although the minister had earlier announced that the government would purchase the entire soybean crop at MSP to support farmers, the delay in the Market Intervention Operation (MIO) is discouraging farmers. He said farmers may switch to alternative crops in the next Kharif season, which will further worsen the situation.
Calling this a critical issue, he said that while the government is advocating self-reliance, farmers are not even receiving the MSP for their produce. SEA has urged the government to expedite MIO operations and procure soybeans in bulk at MSP, he said.
Ajay Jhunjhunwala, former president of SEA, who represented SEA at the stakeholders’ meeting with the minister, also suggested to the government to reintroduce ‘Bhavantar Bhugtan Yojana’ for soyabeans. The SEA representative also urged the government to maintain the current import duties on edible oils and proposed adequate funding for the National Edible Oils Mission – Oilseeds to boost domestic production of vegetable oils.
Futures trading
Stressing the urgent need for the introduction of futures trading in the vegetable oil complex, Asthana said the government has suspended futures trading in mustard, soybean seeds and their derivatives along with crude palm oil (CPO) since December 2021.
The suspension is extended annually. SEA has strongly advocated the resumption of futures trading in soybeans, oilseed rape and their derivatives and CPO.
Asthana said he attended the meeting convened by Union Commerce Ministry Assistant Secretary Monica Gaur last week to understand SEA’s plea for resumption of futures trading. She has assured that she will look into this and has requested SEA to submit a justification note for the consideration of the Union Commerce Ministry, he said.
“It is essential to highlight that current soybean prices are below the MSP of ₹4,892 per quintal, while rapeseed prices are marginally above the MSP of ₹5,950 per quintal. Resuming futures trading in soybeans, canola and their derivatives would help stabilize prices and provide crucial support to farmers. Historically, futures markets have played an important role in supporting pricing mechanisms and reducing the need for government intervention through MSP-based procurement under the MIO,” he said.
The suspension notice expired on December 20. In the meantime, SEBI has extended the suspension of futures trading by just over a month until January 31, 2025. “We understand that this matter is under review and we hope for a favorable decision soon,” he said. said.
B40 program
On Indonesia’s decision to implement the B40 program from January 1, Asthana said this will deplete an additional 3 million tonnes of crude palm oil, in addition to the 11 million tonnes used under the B35 programme. This decision has already led to a rise in crude palm oil prices worldwide, surpassing even soybean and sunflower oil prices. Since India imports 8.5 to 9 million tonnes of palm oil annually, the higher price of CPO is expected to reduce demand, leading to an increase in imports of soya and sunflower oil in the coming months, he added .
