Groundnut output may fall 40% this year

Sharp dip in Gujarat after inadequate rain, oil prices likely to rise

Deficient rainfall in the key groundnut growing areas of Gujarat during the kharif sowing period seems to have taken a toll on the output of the oilseed. Experts indicate an overall decline of up to 40 per cent in the country, down from 4.17 million tonnes (in shells) estimated in the 2011-12 kharif season to around 2.5 mt in the season of 2012-13.

In a recent report by the Solvent Extractors’ Association of India (SEA), groundnut production in Gujarat has been pegged at only 695,000 tonnes in FY13, as compared to 17,35,000 tonnes in 2011-12, a dip of nearly 60 per cent in the state.

“There is a sharp decline in the major growing regions of Saurashtra in Gujarat and parts of Karnataka. Even as sowing in Andhra Pradesh has been stable, there is a possibility of a decline in production. Overall, the country’s groundnut production is likely to dip by about 40 per cent,” said Ashok Sethia, vice-president, Central Organisation for Oil Industry & Trade.

By the SEA’s Gujarat Kharif Groundnut Crop 2012 estimate, sowing was 1.22 million hectares (it was 1.43 mn ha in 2011-12) but harvested area was down nearly 25 per cent at 916,000 ha, mainly due to deficit rainfall. Hence the decline in output to 695,000 tonnes. For the country, sowing fell from 4.32 mn ha in kharif 2011-12 to 3.9 mn ha this year, a fall of 10 per cent. After Gujarat, Andhra is the second largest sowing state, with over a million hectares covered under groundnut. The average yield per hectare has also reduced to 760 kg against 1,238 kg per ha last year. “Due to most of the districts receiving less rain, the crop as well as the quality is seriously affected,” said the SEA report.

SCANTY RAINFALL WEIGHS
State	Kharif acreage (in mn hectares)			Production estimate (in mn tonne)
	‘11-12	‘12-13	Y-o-Y % change	‘11-12	‘12-13	Y-o-Y % change
Guajrat	1.43	1.22	-14	1.73	0.695	-60
Andhra Pradesh	1.05	1.05	-	0.55	NA	-
Karnataka	0.51	0.38	-26	0.35	NA	-
Rajasthan	0.37	0.36	-3	0.55	NA	-
India	4.32	3.9	-10	4.17	2.5	-40
Source: Ministry of Agriculture, Govt of India, industry estimate & SEA.

The lower production is likely to affect the price of groundnut oil. These reached Rs 7,600-7,700 a quintal at the beginning of this month. Prices have since eased to Rs 7,200-7,300 a quintal. Sources in the Saurashtra Oil Mills Association said groundnut oil prices are unlikely to fall below Rs 1,800 per 15 kg this year and could cross Rs 2,200 per 15 kg by December.