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Informist, Tuesday, Aug 13, 2024

 

By Anjali Lavania

 

MUMBAI – Groundnut prices in Gujarat have continued to soften since the southwest monsoon set in. They have been steady or falling since early June, with increased sowing, poor weather conditions, lower export demand, and sluggish domestic demand, traders said. The situation is unlikely to change until this year's kharif crop is ready for harvest, they added.

 

For the first time since 2021, groundnut acreage in Gujarat has crossed 1.8 mln ha in the current kharif season. Groundnut, the state's main oilseed crop, has been sowed across 1.9 mln ha as of Aug 9, against 1.6 mln ha last year, up 16.8%, according to the state kharif acreage report released Monday.

"Due to lower yields of the cotton crop from attacks by pink bollworm, I have shifted to groundnut sowing this year," Ashok Virvani, a Gujarat-based farmer and trader, said. Also, groundnut is a 100-120-day crop unlike cottonseed, which is a 180-day crop, he said.

 

The acreage under groundnut across India is 4.5 mln ha, up 8.4% from a year ago, data from the agriculture ministry shows. Last year, groundnut acreage across India was 4.2 mln ha.

 

Traders also point out that the groundnut seed market has experienced notable fluctuations recently, both in India and globally. "Domestic consumption declined to 5.2 mln tn in 2023-24 (Apr-Mar) from 7.9 mln tn in 2021-22, but is expected to rise to 6.1 mln tn in 2024-25. Currently, exports are seen stabilising at 850,000-975,000 tn. Global exports remained steady at 4.4-4.9 mln tn," Amit Gupta, research analyst at Kedia Advisory, said.

 

"Groundnut sowing area so far this year is 12% higher on year, reaching 4.4 mln ha across the country, according to data released by the Department of Agriculture as of Aug 2," said Indrajit Paul, an edible oil and oilseeds expert. "Significant acreage expansion has been observed in Gujarat, Madhya Pradesh, Rajasthan, and Karnataka. In Gujarat, there has been a notable shift from cotton to groundnut cultivation. This transition is driven by flat cotton prices and groundnut's lower production cost and shorter maturity period."

 

The Indian groundnut market largely depends on export demand. This year, export demand has been poor. India exports three varieties of groundnut--Bold, TJ, and Java. Exports to Iran and Algeria were down this year.  According to Neharu Kher, managing director of Across Overseas Pvt Ltd, it is not viable for farmers to grow groundnut if export demand is weak or absent.

 

"Export demand was very bad this year," Kher said. "Most exporters were unable to ship more than 50 containers, when they used to export 300–400 containers every year." Moreover, prices of Sudanese groundnuts are low currently. Therefore, demand from countries like Indonesia, Malaysia, the Philippines, and Thailand has shifted towards Sudanese peanuts, he said.

 

"In regions like Dwarka, Porbandar, Junagadh, and Rajkot, it has been raining heavily since the start of June. Due to heavy rains, farmers are having difficulty bringing their remaining stocks to mandis, and hence the quality of old stocks is degrading by the day as they are becoming more moisture-laden," Amit Patel, a local trader, said.

 

Currently, groundnut prices in Gujarat's wholesale markets are hovering around 6,000 rupees per 100 kg. In mid-July, they were in the range of 6,500-6,900 rupees per 100 kg. "Markets will stay at this level until the new crop arrives," Kher said. The fresh crop is due to start arriving in early October.  End

 

Edited by Rajeev Pai

 

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