Groundnut oil prices hit record high

Demand-supply gap jacks up price to Rs 1,590 per tin.

Groundnut oil prices have surged to a record high of Rs 1,590 per 15 kg tin amid high demand and lower availability of ground nut for crushing.

Considering the prevailing demand-supply gap, industry insiders see no respite from the soaring prices of the edible oil any time soon.

"The gap between demand and supply has increased as millers are not getting enough groundnuts for crushing activity. Most of the groundnut stock has been consumed in the form of peanuts and its products," said Samir Shah, managing director of Rajmoti Oil Industry from Rajkot.

"It is a fact that groundnut production has increased this year, but millers do not have the benefit of it. The lack of raw material may further increase groundnut oil prices in coming days," he added.

According to the oil milling industry sources, the demand for groundnut oil is estimated to be about 200 tonnes per day, while the production currently is merely 80-100 tonnes per day.

Groundnut oil 'lose' traded at Rs 970-975 for 10 kg in Rajkot market, while groundnut oil new tin hovered at Rs 1580-1590 per 15 kg, which was up by Rs 160 per tin from Rs 1420-1430 per tin during the month of June.

Groundnut bold price remained at Rs 675-760 per 20 kg in Rajkot markets, while in Junagadh the price stood at Rs 550-868 per 20 kg. Meanwhile, groundnut small was priced at Rs 575-800 per 20 kg in Rajkot and Rs .600-834 per 20 kg in Junagadh.

The arrivals have also declined during the month from about 100,000 bags (1 bag = 50 kg) arrived in Saurashtra and Gujarat to currently 60,000-65,000 bags.

Echoing similar sentiments, Vikram Duvani of Rachana Seeds Industries from Junagadh maintained that export demand for groundnut had been rising.

"The export demand is rising from all key export destinations. China is also in a queue to buy groundnut from India. Moreover, groundnut is also used as a replacement of cashew in various products like chocolate, butter as value addition," said Duvani.

"Summer groundnut production is defiantly high but against it, direct consumption and demand of peanuts for export is also high and most of the stocks are being consumed in it. As a result of it, a scarcity of groundnut is felt for the crushing activity," said B V Mehta, executive director of Solvent Extractors’ Association of India (SEA).

According to the estimates provided by the Indian Oilseeds and Produce Export Promotion Council (IOPEPC), the summer groundnut production in Gujarat would remain at around 271,000 tonnes as against 129,000 tonnes last year, showing an impressive growth of 110 per cent.

Kharif groundnut production is also predicted to be higher by around 1.8 - 2.0 million tonnes.