Arrivals hit groundnut oil prices

Peak arrivals of groundnut in shell are pushing the prices of groundnut oil (GN oil) down this festive season. The Saurashtra mandi, the groundnut hub, is witnessing a daily arrival of about one lakh bags (35 kg each).

Though the prices generally go up during the festive season, the more than expected groundnut arrivals to mandis are putting a downward pressure on the price of the commodity. Since the daily carryover stocks cost farmers more, they sell the produce at lower prices.

According to Sanjiv Sawla of M Lakshamsi & Co, an edible oil trader, prices are likely to witness a reversal next week. But, as edible oils have already peaked, prices may move down further.

In the Mumbai spot market, GN oil prices were quoted at Rs 710 per 10 kg, a decline of Rs 10 per 10 kg from last Friday.

On the NCDEX, however, the oil for December delivery declined higher to the tune of Rs 50.60 to close at Rs 762.85 per 10 kg.

India's total groundnut in shell output this year is likely to surpass the benchmark 50 lakh tonnes and settle at around 53 lakh tonnes as against the earlier industry estimate of 49 lakh tonnes.

In the ensuing kharif season, the groundnut kernal output is likely to shoot up to 38 lakh tonnes compared with the previous estimate of 34.30 lakh tonnes and the last season's final output of 24.50 lakh tonnes.

The total marketable surplus of this commodity is likely to grow this year to 13.80 lakh tonnes as against 5.80 lakh tonnes last year.

The crop area under groundnut has gone up by 10 per cent this year, reported at 52.76 lakh hectares as against 46.69 lakh hectares last year.

The higher expected output is despite groundnut losing approximately 5 per cent of the crop area to cotton in Gujarat and roughly 10 per cent to an unknown disease in Karnataka.

The total groundnut oil availability may also jump to 5.52 lakh tonnes this year compared with 2.32 lakh tonnes last year.