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The Solvent Extractors Association of India (SEA) has raise a red flag over the speculation in soyabean prices to the Securities Exchange Board of India (Sebi) seeking action to curb this activity.
“Soyabean contract on NCDEX is witnessing unbridled and excessive speculation in the last few weeks and prices of soyabean have reached Rs 7,250 per quintal which was just Rs 5,750 per quintal a month ago,” the association has written to Sebi. The industry body said that it was hard to fathom what has changed so dramatically in such a short period to warrant this unprecedented upswing in prices.
Atul Chaturvedi, president of the association, pointed out that this excessive speculative activity had the potential to disturb the smooth functioning of the solvent extraction industry engaged in processing soyabean as availability of beans has practically dried up suddenly, which in turn was leading to misinformation. He said the poultry industry which was heavily dependent on soyabean meal for their feed has been finding it difficult to survive.
“In view of the sudden spurt in price of soyabean since its price is rising every day, the market arrivals have reduced as traders and farmers are not selling in hope of a better price,” he said. Moreover, at this price, crushers find disparity of Rs 4,000-5,000 per tonne of processing, he said. In the process, the availability of soyabean meal has reduced dramatically, he explained.
Chaturvedi said that the price of soymeal, ex-factory has touched `60,000 per tonne from Rs 40,500 a month ago and has created a panic in the poultry industry which is the major consumer of soymeal. “The market is now completely dominated by the speculators and is moving upward every day. In the process, both soya crushing and poultry industry are suffering,” he said. The association has urged Sebi to examine the current scenario and take suitable action to maintain order in the market.