MUMBAI (Commoditiescontrol) - While negligible availability of groundnut is forcing oil mills in Saurashtra (Gujarat) to close down their operations, prices of oil also rose Rs. 100-150/15litres during the last one month. There are talks in markets that rise in prices will not halt now. In other words, prices may see further rise in days to come, in fact this jump is termed as just the beginning as arrival of new crop will still take some time.
Mr. Samir Shah, President of Saurashtra Oil Mills Association said that non-availability of raw material is the biggest crisis for oil mills. Most of the oil mills were forced to close down. Currently, daily arrival in entire Saurashtra is at around 15,000-20,000 bags, while mills need minimum supply of 50,000 bags on a daily basis. If the markets get groundnut in such quantity, only 35-40 mills in Saurashtra may run their operations. People who only consume groundnut oil, are its buyers, while consumers who are adaptable to various edible oils opt for palm and soya oil when hit by higher prices, he adds. The situations is so worst that even the mills which are operational are not able to fulfill the current demand. This is the main reason that prices are moving steeply up. According to Mr. Shah, groundnut oil of 15 litres new pack is available at Rs. 1,700-1,720 (tax paid) in Rajkot. While, soyabean refined oil traded at Rs. 624/10kg in Indore. Palm oil sold at Rs. 462/10kg at Kandla Port.
Mr. Shah said that demand in groundnut from regular consumers is steady despite recent price rise, but mills are unable to fulfill the demand as raw materials is not available. He said that Indian farmers are not able to get expected price from oilseeds because imports of palm oil increased and the prices got cheaper. This is the main reason why sowing acreage of oilseeds dropped. Farmers in Gujarat refrained from groundnut sowing. This year, summer groundnut production decreased drastically, which is worrisome for us. He said that the government should take initiative to increase oilseed production and restrict oil imports.
Reiterating the same view, Mr. Kishore Patel from Shri Arvind Oil Mills, Jamnagar said that sufficient groundnut is not available in any markets at present. He informed that summer groundnut kernel is available at Rs. 1,200/20kg, while groundnut kernel used for oil extraction is quoted at Rs. 900/20kg.
New groundnut supply from kharif season will take many months to begin. So, farmers will not sell their produce immediately. They are sure of a possible price rise in groundnut oil. They will not bring produce until groundnut prices cross Rs. 1,000/20kg mark. Mr. Patel said that price rise in groundnut will not halt in the near future as oil mills who are crushing are facing tight availability of raw material. Patel says that groundnut oil will increase Rs. 150/15kg in the near- future.
Mr. Bhoopat Malalia from Rai Narayan Oil Mill, Amreli also have similar views. He said that closures of groundnut crushing plants in Saurashtra is a cause of concern. But then, there are no options left, as raw material is not available. He said that 90 percent of the oil mills have closed for the last 3-4 months. Record export of groundnut kernel is also a major reason behind halting of production by mills. Groundnut kernel export increased 39 percent to 7.08 lakh tonnes in 2014-15.
Exports were at 5.03 lakh tonnes last year (2013-14). Mr. Bhoopat Malalia says that if monsoon remains weak and groundnut acreage does not increase, oil mills will have to face crisis on the existence.
As per the third advance estimate of 2014-15, union ministry of agriculture had said that groundnut production may reduce to 15.91 lakh tonnes during last Rabi season. Last year, groundnut production was 16.56 lakh tonnes in the same season. In Kharif season also, groundnut production reduced from 80.58 lakh tonnes to 50.57 lakh tonnes.
Summer groundnut was sown in only 50,000 hectare in Gujarat this year. Last year, the acreage was 1.26 lakh ha. Agricultural experts said that groundnut sowing area reached at record level in 2013-14, but the farmers did not get even minimum support price (MSP). So, they shifted to other crops and the area decreased drastically. Indian Oil Seeds and Produce Export Promotion Council said that summer groundnut production this year is expected at 91,966 tonnes in Gujarat, which was 1.93 lakh tonnes in the last year.
As far as kharif sowing is concerned, there are reports of groundnut sowing in Andhra Pradesh reaching 2,000 ha till 3rd June, while normal sown area is 7,300 ha. Groundnut was sown in 3,000 ha same period last year.
(By Commoditiescontrol Bureau; +91-22-40015536)
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