The soybean prices in India have hit a record high. For the third straight day, it has hit an upper circuit in the futures markets.

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Soybean prices are up by 12 percent week-on-week, 33 percent in one month, and nearly 105 percent in this year alone. CNBC-TV18’s Manisha Gupta spoke to Dorab Mistry, Director at Godrej International, to discuss it in detail.

Mistry said India deserves to take the blame for this massive bull run in vegetable oil, oilseeds. "The stupid decision was taken by the Indian government to cut the import duty on vegetable oil particularly palm oil and then to open up India, open up the floodgates for import of RBD only -- this was like lighting a fuse. The Indian government for whatever reason, and I cannot understand it, if you can understand the motives of the Indian government good luck, they pushed up and created a massive bullish scenario in the world."

“Everybody realise that there is trouble in India, there is a crisis in India. The government is panicking and prices moved up. Today prices are 10 percent higher. The government foolishly thought that by cutting the import duty, they would give relief to the Indian consumer, forget relief they are imposing misery on the Indian consumer. So, the Indian government is responsible and they have got to decide whether they want to continue with this or whether they want to do something more sensible.”

He added that the other reason was COVID and the labour shortages in the palm oil-producing regions, particularly in Malaysia and Indonesia. The situation in Malaysia and Indonesia is similar to that of India in May. Several palm oil mills in these countries have closed as workers falling ill. They are also facing a shortage of oxygen and medicines.

On oil prices Mistry said, there isn't much room for the price to rise further. "Because remember, the market has had a lot of time to react to the foolish Indian decision, you know, the decision came over a month ago. So there has been plenty of room for speculators, traders, all the people who wanted to benefit from this bull market to benefit from that. I think prices are more or less at the peak."

Watch the accompanying video for more.

(Edited by : Priyanka Rathi)