Forward trading The prices of mustard, groundnut and soybean oilseeds declined in the country’s oil-oilseeds market on Monday due to fall in the prices of cottonseed meal. For this reason, while there was a strong improvement in the prices of groundnut oil, soybean oil and cottonseed oil, the prices of mustard oil remained at the previous level. Due to lack of buying of already high priced palm and palmolein oil, the prices of these two oils also closed at their previous levels. Chicago Exchange remained closed today, while Malaysia Exchange showed slight improvement. Market sources said that speculators today brought down the price of cottonseed meal in futures trading to the price of three-four years ago.
Do farmers benefit from futures trading?
It is noteworthy that cottonseed and cottonseed are obtained from cotton and while 10 percent edible oil is obtained from the crushing of cottonseed, about 90 percent cottonseed cake is obtained which has an important contribution in meeting the requirement of cake in the country. Due to fall in the price of this oil, the prices of other oils also weaken and it affects the prices of related edible oils. Sources said that the Cotton Corporation of India (CCI) had started the purchase of cotton gin and the sale of cotton seed (oilseed) from it from November 11. This price was reduced by CCI to Rs 3,000 quintal in December 2024. On the other hand, the price of cottonseed cake in futures trading was Rs 3,800 per quintal, which was gradually increased to Rs 2,700 quintal by the speculators. He said that after that CCI increased the price of cotton Narma by Rs 500-600 per quintal but there was no significant impact on the price of cottonseed meal in futures trading. That means, the price of Khal which was earlier Rs 2,700, was increased marginally to Rs 2,766 per quintal. Perhaps the real intention of the speculators may be to loot the farmers’ produce cheaply by distorting the prices of futures trading. Now there is a need to understand whether farmers or the oil industry benefit from this futures trading? Was it supposedly created for ‘hedging’ and actual price discovery or for speculation? The true character of futures trading can be understood from this entire matter.
Farmers feel cheated
Sources said that the futures trading has a stock of only 45,000 tonnes of cottonseed meal but deals of 60,000 tonnes have been made in the futures trading. On the other hand, deliberately breaking the prices at the time of harvest in futures trading with very low stock spoils the business sentiment of the entire oil-oilseeds industry due to which farmers feel cheated. He said that due to fall in the price of cottonseed cake, the price of mustard cake fell marginally and due to this reason the prices of mustard oil remained at the previous level. While the prices of groundnut and soybean oilseeds declined due to similar reasons, the prices of groundnut and soybean oil showed improvement due to their losses being compensated by oil.
Soybean is being sold 15% below MSP
Soybean is still being sold at about 15 percent below the Minimum Support Price (MSP). Imported soybean degum oil, which was earlier being sold at Rs 5 per kg below the cost, is today being sold at Rs 3 per kg, which shows an improvement in the price of this oil. Sources said that the price of cottonseed oil improved due to decrease in arrivals and fall in the price of cake. Due to less arrivals and lack of purchase of palm and palmolein which were already at higher prices, the prices of CPO and palmolein remained at the previous level.
The prices of oil and oilseeds were as follows:
- Mustard oilseeds – Rs 6,500-6,550 per quintal.
- Groundnut – Rs 5,900-6,225 per quintal.
- Groundnut Oil Mill Delivery (Gujarat) – Rs 14,100 per quintal.
- Groundnut refined oil – Rs 2,140-2,440 per tin.
- Mustard oil Dadri – Rs 13,550 per quintal.
- Mustard Pakki Ghani – Rs 2,300-2,400 per tin.
- Mustard Kachchi Ghani – Rs 2,300-2,425 per tin.
- Sesame Oil Mill Delivery – Rs 18,900-21,000 per quintal.
- Soybean oil mill delivery Delhi – Rs 13,600 per quintal.
- Soybean Mill Delivery Indore – Rs 13,325 per quintal.
- Soybean oil Degum, Kandla – Rs 9,600 per quintal.
- CPO Ex-Kandla – Rs 12,600 per quintal.
- Cottonseed Mill Delivery (Haryana) – Rs 12,400 per quintal.
- Palmolein RBD, Delhi – Rs 14,050 per quintal.
- Palmolein ex- Kandla – Rs 13,100 (without GST) per quintal.
- Soybean grain – Rs 4,350-4,400 per quintal.
- Soybean loose – Rs 4,050-4,150 per quintal.
(With inputs from PTI/Language)
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