Mandi prices of soybean rise on hike in import duty, likely to cross MSP as arrivals commence
Following a recent hike in import duties on edible oils, the mandi prices of soybean in India have risen by around ₹500 per quintal. With the new minimum support price (MSP) for the 2024-25 season set at ₹4,892 per quintal, soybean prices are now at par with this level. The increase in import duties, which saw crude and refined oil rates rise by 22%, has made imports costlier, pushing edible oil producers to rely more on domestic procurement, driving up soybean prices further.
Since the government’s announcement of a hike in the import duty on edible oil two weeks ago, the mandi prices of soybean, a key kharif oilseed variety, have risen by around Rs 500 per quintal. With the new season’s minimum support price (MSP) set at Rs 4,892 per quintal for the 2024-25 season (July-June), soybean prices are now at par with this level as arrivals begin in the market.
Trade sources told FE that in some markets, mandi prices have already surpassed the MSP, and prices are expected to stay above the benchmark when arrivals peak in November. The increase in import duties on crude and refined oils has made importing costlier, forcing edible oil producers to procure more from the domestic market .
The government recently raised import duties on crude palm, soybean, and sunflower oils to 27.5% from 5.5%, while duties on refined edible oil rose to 35.75% from 13.75%. This implies a net increase of 22% on both crude and refined edible oils, making imports significantly more expensive.
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