SEA asks Govt to procuring soyabean at MSP, build buffer stocks

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The Solvent Extractors’ Association of India (SEA) has urged the Centre to procure soyabean at the Minimum Support Price (MSP) and build buffer stocks.

In a recent meeting of the stakeholders from agriculture sector with the Union Agriculture Minister, Shivraj Singh Chouhan, the SEA explained to the Minister on the need for the Government to procure soyabean at MSP and stock it.

In his monthly letter to the members of SEA on Monday, Sanjeev Asthana, SEA President, said, soyabean farmers are facing significant hardships as the current market price is much lower than the MSP, forcing them to sell it at around ₹4,250 a quintal.

Though the Minister had previously announced that the Government would purchase the entire soyabean crop at MSP to support farmers, the delay in the Market Intervention Operation (MIO) discourages farmers. He said farmers may shift to alternative crops in the next kharif season, exacerbating the situation.

Terming this as a critical issue, he said while the Government advocates for self-reliance, farmers are not even receiving the MSP for their produce. SEA has urged the Government to expedite the MIO operations and procure soyabean at MSP in large quantities, 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 soyabean. SEA representative also urged the Government to maintain the current import duty on edible oils and suggested sufficient funding for the National Mission on Edible Oils – Oilseeds to boost domestic production of Vegetable oils.

Futurers trading

Stressing the urgent need for the introduction of futures trading in vegetable oil complex, Asthana said the Government has suspended futures trading in mustard, soyabean seeds, and their derivatives, along with crude palm oil (CPO) since December 2021.

The suspension has been extended annually. SEA has strongly advocated for the resumption of futures trading in soyabean, rapeseed and their derivatives and CPO.

Asthana said he attended the meeting called by Monica Gaur, Deputy Secretary, Union Ministry of Commerce, last week to understand SEA’s plea for resumption of futures trading. She has assured to look into and requested SEA to submit a justification note for Union Ministry of Commerce’s consideration, he said.

“It is essential to highlight that the current prices of soyabean 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 soyabean, rapeseed and their derivatives would help stabilize prices and offer critical support to farmers. Historically, futures markets have been instrumental in supporting price mechanisms and reducing the need for government intervention through MSP-based procurement under the MIO,” he said.

The suspension notification expired on December 20. In the interim, SEBI has extended the suspension of futures trading by little over a month until January 31 2025. “We understand that this matter is under review and we hope for a favourable decision soon,” he said.

B40 programme

On Indonesia’s decision to implement the B40 programme from January 1, Asthana said this will deplete an additional 3 million tonnes (mt) of CPO, on top of the 11 mt used under the B35 programme. This decision has already caused a rise in CPO prices globally, surpassing even soyabean and sunflower oils. As India annually imports 8.5-9 mt of palm oil, the higher price of CPO is expected to reduce its demand, leading to an increase in imports of soyabean and sunflower oils in the coming months, he added.