- New crop arrivals exert pressure on plant prices
- Weak oil parity and lower import duties squeeze crushing margins
India’s soybean market remained under pressure on 24 September as rising new-crop arrivals increased availability and weak edible oil realizations limited plant buying. A key plant’s price fell to INR 5,900/quintal (qtl) from INR 6,040/qtl on 23 September, down INR 140/qtl. Several other plants were also quoted around INR 5,900/qtl. All-India arrivals were reported at around 150,000 bags, keeping near-term supply pressure elevated.
New-crop arrivals weigh on soybean prices.
Mandi prices showed a mixed trend amid increasing arrivals. Indore prices rose INR 200/qtl to INR 5,200/qtl, while another major market gained INR 285/qtl to INR 5,885/qtl. In contrast, prices at several other centers declined by INR 100-250/qtl, indicating uneven local buying interest.
Plant prices were largely weaker, with major buying centers quoted at INR 5,550-6,250/qtl. Several plants reduced prices by INR 50-120/qtl, while others remained unchanged. The divergence between mandi and plant prices reflects cautious procurement by crushers as new-crop availability increases.
Weak oil parity pressures crushing margins
Soybean oil realizations remained weak. Kandla soybean oil was quoted at INR 1,420/10 kg against an import parity of around INR 1,503/10 kg, leaving domestic prices INR 83/10 kg below parity. CPO (Crude Plam Oil) was quoted at INR 1,450/10 kg against parity of INR 1,509/10 kg, while RBD olein stood at INR 1,420/10 kg against INR 1,592/10 kg.
Sunflower oil was an exception, trading at INR 1,720/10 kg against an import parity of INR 1,625/10 kg, a premium of INR 95/10 kg.
Soybean oil was around INR 245/10 kg below mustard oil at INR 1,665/10 kg and INR 30/10 kg below palm oil at INR 1,450/10 kg. The weak relative value of soybean oil is limiting crushing economics and encouraging processors to remain selective in soybean procurement.
The reduction in edible-oil import duties effective 24 September is adding further competition from imported oils. The basic customs duty on crude soybean and palm oils was reduced from 10% to 5%, while refined soybean oil duty fell from 32.5% to 27.5%. Crude sunflower oil duty was reduced to zero, while refined sunflower oil duty declined to 22.5%.
The global soy complex offers mixed signals.
The global soy complex provided limited support. Soybean oil declined d-o-d across major contracts on 24 September, with October at 66.93 cents/lb and December at 67.55 cents/lb. Soybean futures also edged lower, while soymeal strengthened, with the October contract gaining 1.57%.
Argentina soybean oil FOB prices were mixed, while Brazilian values declined across October-December. Malaysia palm oil futures also opened weaker on September 25, limiting broader support from the vegetable-oil complex.
Domestic soy was quoted at INR 46,000/t, down INR 500/t. Although firmer soybean prices provided some support to crushing economics, the gain was insufficient to offset pressure from weaker soybean oil realizations.
Outlook
Soybean prices are likely to remain under pressure in the near term as new-crop arrivals increase and weak oil realizations constrain crushing margins. INR 5,800/qtl remains an important support level. Stronger soymeal prices and selective buying in mandis could, however, limit the downside.
A sustained recovery in soybean prices would require an improvement in edible-oil realizations, crushing margins, and the broader global vegetable-oil complex.
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