After having ruled firm in past couple of months, groundnut oil prices have started easing with new groundnut crop hitting markets. Groundnut prices in Rajkot have fallen by around Rs 225-230 per tin of 15 kg within a week. Industry players expect prices to come down further as surge in arrivals will put pressure on prices.
Gujarat, one of the main groundnut growing states in the country, is currently witnessing a daily arrival of 1.35 lakh bags (one bag weighing 50 kg). Groundnut prices in Rajkot declined by Rs 225-230 per tin to Rs 1,250 to 1,255 per tin on Saturday, which were ruling firm at Rs 1,470-1,475 per tin a week ago. On October 18, groundnut prices saw a sharp fall of Rs 90 per tin in a single day.
Around 70 per cent oil mills in Gujarat's Saurashtra region, a hub of groundnut oil producing in India, have started crushing new crop for oil production.
"Apart of increased arrival of groundnut, poor demand is also one of the factors responsible for reduction in groundnut oil prices," said Samir Shah, MD, Rajmoti Oil Industry.
"Groundnut production picture in India looks rosy this year," said Suresh Kaneria, Kaneria Oil Industry.
As per the survey conducted by The Solvent Extractors Association (SEA) of India, Gujarat is likely to witness groundnut yield of nearly 1,120 kg per hectare, which shows a jump of 35 percent over 830 kg per hectare last year. On the back of higher yield, SEA estimates groundnut production in Gujarat to increase by 5 lakh tones to 18.70 lakh tones in 2010-11.