Groundnut oil price in Gujarat at two year's high

Less availability of crop for crushing results in reduced oil production and high price

At a time when seasonal demand for groundnut oil is at its peak, price of the oil across Gujarat has touched a two year's high on account of scarcity of groundnuts for crushing.

According to groundnut oil millers, the output is estimated to be very low this year, as a consequence of which, mills face a shortage of the raw material.

"It is the peak seasonal demand period and mills are not getting enough groundnuts for crushing to match the demand. As a result, price of the oil is rising," said Samir Shah, president, Saurashtra Oil Mills Association (SOMA).

The present price of groundnut oil in the retail market ranges from Rs 1,605-1,610 per 15 kg new tin. It was two years back when the cost of 15 kg oil tin exceeded Rs 1,600. During December, the price has gone up by Rs 160 per tin.

Millers expect the price to touch Rs 1,800 per tin in the next two months.

In the wholesale market, loose groundnut oil is priced from Rs 925-930 per 10 kg.

The rise in cost of groundnut oil comes at a time when the crop's annual national production was estimated to be down 24 per cent on account of delayed monsoon in Gujarat, the major groundnut producing state in the country, and farmers shifting to other crops this season.

The estimates released by Central Organization for Oil Industry and Trade (COOIT) a fortnight back pegs India's groundnut output for 2014-15 at 3.57 million tonnes, down from last year's 4.71 million tonnes. Production of the crop in Gujarat is estimated to be 1.44 million tonnes this year as against 2.50 million tonnes recorded last year.

Ravaji Mandanaka, president, Gondal Oil Mills Association, a local body, said, "Farmers don't have requisite stock of groundnut as the crop size is almost half of last year. Current stock is utilised for peanut export or for direct uses."

Daily groundnut arrival in different markets of Gujarat stands at about 25,000-30,000 bags (one bag is 35 kg), nearly 40 per cent down from that of last year.

Country's groundnut oil availability for 2014-15 has been estimated at 240,000 tonnes by The Solvent Extractors' Association of India (SEA). It is down by 170,000 tonnes or 41.50 per cent from last year's 410,000 tonnes.

Mandanaka said, "Due to shortage of raw material, most of the groundnut oil mills are running for only two or three days in a week."