Groundnut oil prices have started declining after a higher production estimate for summer groundnut crop. Also, low demand for the edible oil has also added to the weakness in the groundnut oil prices. Millers and traders see prices to remain weak during this month.
In spot market at Rajkot, groundnut oil prices hovered in the range of Rs 2030-2035 per 15 kg new tin on Monday, down by Rs 80 per tin over the past one week.
"Currently, the demand for groundnut oil is almost nil as prices were too high till recently. We are hopeful to get better supply for crushing as summer groundnut crop arrivals are about to start. Moreover, this year we are expecting 50 per cent higher summer groundnut crop," said Ravajibhai Mandanaka, president of Gondal Oil Mills Association.
Mandanaka estimated summer groundnut production in Gujarat at about 450,000 tonnes.
Even as arrivals of summer groundnut crop has started in some places, the prices of the oilseed has also started coming down. During May, groundnut prices have declined by Rs 60-70 per 20 kg to Rs 900-1050 per 20 kg.
"Due to high prices of groundnut oil, most of the oil consumers have diverted to other edible oils like cotton oil, soya oil and sunflower oil. Only higher income class is buying groundnut oil," informed a Rajkot-based edible oil trader. According to industry players, lower demand for peanuts from traders and exporters has increased the availability of groundnut for crushing. "Groundnut oil price is coming down as availability of groundnut has increased. Moreover, new summer crop will start arriving in the market after 10 to 15 days. It would further put downward pressure on the prices," said Suresh Kaneriya, managing director of Kaneriya Oil Mill.
"Over the past months, the consumption of groundnut oil has fallen by 30-40 per cent as compared to last year," he said adding that groundnut oil prices may decline to Rs 1800-1900 per tin in a month's time.
The Indian Oilseed and Produce Export Promotion Council (IOPEPC) has estimated summer groundnut production in Gujarat at around 459,000 tonnes, about 56 per cent higher than 294,000 tonnes last year.