Saurashtra mills cut groundnut oil output

Despite receiving normal and favourable rain fall during last monsoon, 70 per cent of the oils mills in Saurashtra have cut down their edible oil production, due to the decline in the inflow of groundnuts.

It is estimated that out of about 1,000 edible oil mills in Gujarat, 700 mills are situated in Saurashtra with an annual turnover of about Rs.10,000 crore.

More than 40,000 merchants and brokers are connected to these oil mills, providing work, directly or indirectly to some 40 lakh workers daily. But the ground reality is much worse.

Production has plummeted to newer lows and around 500 mills in Gondal, Rajkot and Jamkhambhalia have downed their shutters.

According to Ukabhai Patel, president- Saurashtra Oil Miller's Association (SOMA), high cost of groundnut and the decrease in the inflow of the raw material have brought in such a position.

Added to that, is the sale of groundnut to states like Maharashtra, Andhra Pradesh, Madhya Pradesh and Rajasthan, which further

declines the raw material inflow. Industry sources point out that the wrong estimate of seasonal groundnut yield is also a reason for cut in edible oil production.

Groundnut is the main crop for all the seven districts of Saurashtra. As this is a monsoon-based crop, the production varies with the total rainfall received.

It was earlier estimated that the production would be around 30 lakh tonne.

But the actual yield was only around 26 to 28 lakh tonne, there by reducing the oil production.

Looking to the reduced availability of raw material, the oil mills work for only four days a week now and produce edible oil at the rate of 40 to 50 tankers a day.

Under these circumstances, the mills have decided to stop the production due to the high price factor in the market Patel added.

The groundnut inflow has reduced to 75 to 85,000 in the marketing yard, and this short arrivals has pushed up the price by Rs 10 to 15 per tin.

However, trade sources said the rise in the price of edible oil is directly connected with the jump in prices of soya and palm oils in the international market and the drop in oil seed crop in the United States.

On sticky ground

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• Out of about 1,000 edible oil mills in Gujarat, 700 mills are in Saurashtra.
• The total annual turnover of the mills is about Rs 10,000 crore.
• Around 500 mills in Gondal, Rajkot and Jamkhambhalia have downed their shutters.
• Wrong estimate of yield a reason for cut in edible oil production.