Soybean Procurement At MSP

India’s soybean harvest this year has been abundant, but the surplus has kept market prices below the minimum support price (MSP). To help farmers, government agencies have stepped in, buying about 1 million tonnes of soybean under the price support scheme since October.

This effort spans six major producing states: Madhya Pradesh, Maharashtra, Rajasthan, Karnataka, Gujarat, and Telangana. Farmers are being paid the MSP of USD 0,59 per kg, set for the 2024-25 season. By mid-January 2025, agencies like NAFED and NCCF aim to continue their procurement efforts, which have already benefited 412,000 farmers.

Many Reasons For Low Prices

Soybean prices in India have been on a downward trend for months. Here’s why:

1. Global Oversupply: A bumper harvest worldwide has led to an oversupply of soybeans, driving prices down globally and in India.
2. Soymeal Impact: Falling soybean prices have also affected soymeal, a key animal feed ingredient. By late December, the ex-factory price of soymeal in Indore had dropped to USD 0,36 per kg, a steep fall from USD 0,51 per kg earlier this year.

Government Efforts To Stabilize the Market

India produced an estimated 13,36 million tonnes of Kharif oilseeds this year, slightly higher than last year. To stabilize the market and protect farmers, the government has introduced several measures:

1. Increased Import Duties:
   • In September 2024, the import duty on crude palm, soybean, and sunflower oils was raised from 5,5% to 27,5%.
   • The duty on refined edible oil was increased from 13,75% to 35,75% to promote local production.
2. Boosting Domestic Production:
   • Through the national mission for oilseeds and pulses, the government is working to increase production and reduce reliance on imports. Currently, 58% of India’s edible oil needs are met through imports.

The government’s intervention has provided short-term relief for farmers, but global oversupply continues to weigh on prices. Procurement at MSP and higher import duties may help stabilize the market in the coming months. However, long-term improvements will require sustained efforts to boost domestic production and reduce India’s dependency on imported edible oils.

Conclusion

The bumper soybean harvest has presented both opportunities and challenges for Indian farmers. Falling prices have been a major concern, but government procurement and policy changes are helping to ease the pressure. As the focus shifts to strengthening local production and reducing imports, these measures could pave the way for a more balanced and sustainable market.





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