India's groundnut output may fall 29% this kharif season on lower rainfall

Kharif season contributes nearly 80% of India's groundnut output, rabi takes up the rest

In a major impediment to India's goal of achieving self-reliance in edible oil, the country’s groundnut output is likely to decline by a staggering 29 per cent this kharif season due to deficient rainfall in major producing states including Gujarat, Karnataka and Maharashtra.

A study conducted by the apex industry body the Solvent Extractors’ Association (SEA) showed India’s total groundnut output at a mere 3.7 million tonnes for the current kharif crop season compared to 5.3 million tonnes reported in the same season previous year. Kharif season contributes nearly 80 per cent of India’s groundnut output and rabi takes the rest.

The sharp decline in kharif groundnut crop is set to reduce availability of one of India’s largest oilseeds, resulting in a proportionate decline in crushing and availability of its derivatives including oil and meal. This will translate into increased reliance on India’s vegetable oil imports which meet nearly 65 per cent of the country’s overall demand.

“Crop was damaged in major growing states including Gujarat and Karnataka due to deficient rainfall this monsoon season. A number of districts, including Saurashtra and Kutch in Gujarat, received less than 70 per cent of average rainfall this year. Groundnut prices, however, are unlikely to move up due to seed and oil prices’ global linkages,” said B V Mehta, Executive Director, SEA.

In its First Advanced Estimate announced on September 26, the Ministry of Agriculture has forecast India’s groundnut output at 6.33 million tonnes this kharif season as against the target and last season’s output of 7.54 million tonnes reported.

 

An industry expert said that the government had procured around 500,000 tonnes of groundnut last year. The government agency Nafed is in the process of disposing it off before the new season crop hits the market.

“Hence, groundnut prices are unlikely to move up this season even if export demand picks up,” said the expert.

A marginal upsurge in groundnut output was estimated in Rajasthan due to favourable climatic condition and positive crop progress. Groundnut output in Rajasthan is estimated at 820,000 tonnes for the current kharif season compared to 800,000 tonnes during the comparable season last year.

India exports around 500,000–600,000 tonnes of groundnut every year to various countries including the South East Asia, Europe and China.

Mehta forecasts India’s groundnut exports to remain the same this year as well. 

India’s southwest monsoon rainfall stood at 92 per cent of the long period average (LPA) which is considered normal. But the distribution remained erratic with surplus in some regions and deficiency elsewhere.