Soybean oil is one of the most important edible oil used in India. Soybean oil in its crude form is the second most traded oil in international market after palm oil. Degummed (Crude) and Refined soy oils are the two traded forms of the commodity in the spot as well as futures markets. In India, soybean arrival starts from early October. Crushing for oil and meal starts in October and peaks during the subsequent two-three months.
Nearly all soybeans are processed for their oil. Soybean oil is used in cooking and frying foods. Margarine is a product made from soybean oil. Salad dressings and mayonnaises are made with soybean oil. Some foods are packed in soybean oil (tuna sardines, etc.) Baked breads, crackers, cakes, cookies and pies usually have soybean oil in them.
Soy-based lubricants are as good as petroleum-based lubricants, but can withstand higher heat. More importantly, they are non-toxic, renewable and environmentally friendly. The high-protein fiber (that which remains after processing has removed the oil) is toasted and prepared into animal feed for poultry, pork, cattle, other farm animals and pets.
Indian Soybean Oil prices are highly correlated with the CME prices. On a broader scale, the following factors affect Soybean Oil prices.
Production dependence upon agro-climatic conditions e.g., rainfall, temperature etc. Concentration of production base in few countries (USA, Argentina, Brazil) as against its widespread consumption base Its close link with its internationally traded substitutes (Palm, Mustard oil), and its base raw material (soybean) in addition to its co-derivative (soy meal)
The crush margin between Oil, Meal and seed Government Import Policy The nature of the existing long drawn value chain