Soybean Prices Decline in Madhya Pradesh; Farmers Waiting for MSP Purchase to Start
07 October 2024, New Delhi: Madhya Pradesh, India’s largest soybean-producing state, has witnessed a sharp decline in wholesale soybean prices during the first week of October 2024. Alongside, the market arrivals of soybeans have significantly reduced compared to last year. In the first seven days of October 2024, only 79,997 tonnes of soybean arrived in various mandis across the state, a sharp 56% drop from the 1,85,194 tonnes recorded during the same period in October 2023.
Price Decline Overview
During the first week of October 2024 (01-08 October), the average wholesale price of soybean in Madhya Pradesh was ₹4,112 per quintal. This marked a 3.93% decline from the previous week (24-30 September 2024), where prices stood at ₹4,280 per quintal. In comparison, prices in the third week of September 2024 (16-23 September) were even higher at ₹4,432 per quintal, showing a steeper 7.22% fall.
Year-on-year, the price of soybeans was ₹4,174 per quintal during the first week of October 2023, slightly higher by 1.49% compared to October 2024. This indicates that prices are trailing below last year’s levels as well.
Sharp Drop in Market Arrivals:
Because of the falling prices, the market arrivals of soybean in Madhya Pradesh have seen a significant drop. In the first week of October 2024, only 79,997 tonnes of soybean were brought to mandis for sale, as compared to 1,85,194 tonnes during the same period last year—a substantial 56% decline.
Farmers are reportedly holding back their stock in anticipation of the government beginning its Minimum Support Price (MSP) procurement for soybean soon. They expect to receive better prices once the government initiates MSP-based purchases, at which point they will bring their crops to the market for sale. The Madhya Pradesh government has declared to start purchase of soybean on minimum support price from 25th October and will go on till 31st December.
Economic and Seasonal Factors:
The decline in soybean prices and reduced market arrivals can be attributed to several factors. Delayed rains and subsequent delays in the harvest season in Madhya Pradesh have impacted soybean arrivals. Additionally, fluctuations in international soybean demand and domestic market volatility have further contributed to the price decline. Farmers are concerned that a glut of supply could push market prices even lower, prompting them to delay selling their produce.
Comparison with Other States:
While Madhya Pradesh has seen a significant drop in prices, other states have shown varied trends. For instance:
- In Maharashtra, the price of soybean fell to ₹4,237 per quintal, down from ₹4,414 per quintal in the previous week, marking a 4.01% drop.
- In Gujarat, prices saw a marginal decline of 0.32%, from ₹4,404 per quintal to ₹4,390 per quintal.
On the other hand, states like Chhattisgarh witnessed a price increase. Soybean prices in Chhattisgarh rose by 1.63%, from ₹4,241 per quintal to ₹4,310 per quintal.
The decline in soybean prices in Madhya Pradesh, coupled with the reduced market arrivals, highlights the farmers’ anticipation of government procurement at MSP. Uncertainty around market prices and reliance on government intervention have shaped the strategy of farmers, leading to a sharp reduction in market supply.
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