Worried over future contracts, farmers hold on to soyabean stocks, seek better prices

Worried over future contracts, farmers hold on to soyabean stocks, seek better prices

Two months after harvesting the kharif soyabean crop, Narayan Singh, a farmer from Nipaniya Baijnath village of Malwa region in Madhya Pradesh, is still holding on to a chunk of the produce in anticipation of higher prices.

In this kharif season, Singh harvested nearly 55 quintals of soyabean crop from his 10 acres land. He has so far sold nearly 20 quintals in the open market at an average price of Rs 5,400 per quintal. Last year, he got nearly Rs 6,500 per quintal by selling oilseeds.

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Singh is not an exception as several soyabean growers in the state want higher prices.

Last year till mid-December, farmers were aware of future prices on commodity burse platforms such as National Commodity and Derivatives Exchange (NCDEX). But on December 20, 2021, Sebi banned futures trade of wheat, paddy (non-basmati), chana, mustard seeds, soyabean, crude palm oil and moong for one year. Earlier, chana (gram) and mustard seed futures trade was suspended on October 8 and August 16 in the same year.

“In absence of future contracts, farmers are facing challenges, including tracking real-time rate of the commodity,” says Niraj Jat, CEO, Avantika Aatm Nirbhar Krashak Producer, an Agar district-based farmers’ producer organisation (FPO).

Considering rising input cost, current rates are too low, Jat said. He added that in absence of a future contract mechanism, growers have no idea of real-time prices till they visit nearest mandis in Agar and Ujjain.

Avantika Aatm Nirbhar Krashak Producer, with nearly 4,600 farmer members from 32 villages in Agar district, sold nearly 9,600 quintals of soyabean last season at around Rs 5,900 per quintal.

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Similarly, the farmers associated with Samradha Kisan Producer, an FPO based in Kandariya village, are also holding on to soyabean stock. The FPO, with 1,570 members, reported a turnover of Rs 4.7 crore last year. CEO Virendra Singh Songara says that using the ‘options in goods’ on NCDEX, they were able to hedge nearly 3,000 quintals of soyabean last season.

The Soyabean Processors Association of India has estimated the kharif 2022 soyabean crop at 12.03 million tonne (MT) against 11.8 MT previous season.

With almost 5.3 MT, Madhya Pradesh is the highest soyabean producing state followed by Maharashtra (4.8 MT) and Rajasthan (0.7 MT). Malwa region, which comprises 13 districts, including Ujjain, contribute 70% of Madhya Pradesh’s soyabean production.

Nearly 50 FPOs are active in soyabean-related activities in this region.

(Travel for the story was sponsored by NCDEX)