Over 40% groundnut shelling units down shutters

Lack of export demand for peanuts in the international market poses major threat

Lack of export demand for peanuts in the international market has posed a major threat for the groundnut shelling units in Saurashtra.

Moreover, industry sources informed that new export regulations for shelling units has also adversely affected the business.

Since the beginning of the current season in October 2013, shelling units of Gujarat have not received good business from overseas buyers. Exporters are demanding peanuts at lower rate, which is not viable for shelling units.

"We have disparity in price as exporters are demanding groundnut for Rs 51 per kg but our production cost is about Rs 53 a kg. In this condition business is not viable and as a result shelling units have to close their operations", said Mukund Shah, president of Gujarat Oilseeds Processors Association (GOPA).

According to Shah, there are more than 2,000 groundnut shelling units of in Gujarat. Out of these about 40 per cent units are not operational. The rest of the units are also operating at reduced capacity.

The trade body also held responsible, the registration rules for lower business.

As per DGFT notification dated January 3, 2013, exports of groundnut have been subjected to registration with APEDA along with controlled Aflatoxin level certificate issued by APEDA recognized laboratories.

Shah said, "New rules for shelling units is very costly and time-consuming. Hence small shelling units can not afford it. Some of the shelling units have already changed operations and shifted to other commodities."

"Overall demand in the international market for Indian peanut has declined due to heavy selling by the USA as they have large carry-over stock of groundnut. But we are hopeful that demand will prop up after January 2014.", said Kishor Tanna, President of Indian Oilseed and Produce Export Promotion Council (IOPEPC).

According to market sources, Africa is also offering peanuts at the lower rate.

As per IOPEPC data, during April to October 2013, India has exported about 211,765 tonnes groundnut. Last year in same period it was 341,678 tonnes. This year export has declined by 129,913 tonnes mainly after government's notification.

Vikram Duvani, managing director, Rachana Seeds Industry, Junagadh said, "Demand from China and other Asian countries are very nominal and in the near future, there is no hope for good demand for Indian peanuts."

Meanwhile, Arrival of groundnut has increased to 150,000 bags (1 bag = 35 kg) in Gujarat. Price of groundnut is ruling at Rs 600-725 per 20 kg. The IOPEPC has estimated kharif groundnut production fir this year at 4.91 million tonnes from five states - Gujarat, Rajasthan, Andhra Pradesh, Karnataka and Tamil Nadu - which account for close to 90 per cent of total output. This is higher by 2.1 million tonnes as compared to Kharif 2012, when the crop was only 2.81 million tonnes in these states, owing to monsoon failure.

The, Solvent Extractors' Association of India recently issued a kharif crop estimate of the Central Organization for Oil Industry & Trade. The report stated kharif groundnut production for 2013-14 would be 4.71 million tonnes, against last year's 2.62 million tonnes.

For Gujarat, it has estimated the production at 2.5 million tonnes.