The availability of groundnut oil during the current year is estimated to decline 60 per cent due to low production and increased use of the commodity for purposes other than producing edible oil. However, this may not affect the prices as stock of other edible oils such as palm, soy, and cotton are sufficient.
As per the data given by the Solvent Extractors’ Association of India (SEA) from the discussions at the 47th All India Convention on oilseeds in Indore on Sunday, around 440,000 tonnes of groundnut will be available for crushing in 2009-10 compared with 1.05 million tonnes (MT) last year.
Going by the estimates, around 180,000 tonnes will be available for crushing this kharif season compared with 420,000 tonnes last year, registering a decline of 60 per cent.
SEA estimated the total groundnut production to be 3.29 MT this season, out of which 1.38 MT would be produced in Gujarat. The total production was 4.22 MT last year and around 1.9 MT was produced in Gujarat.
“Prices will not firm up despite the fact that crushing will be lower. In fact more and more people are now using cotton oil, palm and soy. It will be a problem only for millers. Prices will go up only when the demand will increased during festive season,” said Balvantrai Kamdar, a Saurashtra-based miller. Groundnut oil consumption has declined in the last three-four years.
“Availability of other edible oils is sufficient and this will help contain prices of groundnut oil. Groundnut oil is used mostly in Gujarat,” said Badruddin Khan, senior research analyst, Angel Commodities.
At present groundnut oil price is ruling at around Rs 640-645 per 10 kg but price would decrease as soon as groundnut arrivals pick up. According to market sources, price would stabilise in the range of Rs 600-620 per 10 kg in days to come.