Persistently higher groundnut oil prices for last one month led several of the oil millers in Gujarat to either down their shutters or cut their production. More than 90 per cent oil mills have downed their shutters while rest of the mills are working part time in a week, industry sources informed.
In Gujarat, there are about 250 small and medium-sized groundnut oil mills, out of which only 15-20 mills are working for two to three days in a week.
Due to shortage of groundnut for crushing, groundnut oil prices have increased for last one month and reached a high of Rs 1890-1900 per 15 kg tin. The groundnut oil prices have increased by about Rs 130 per tin over the past one month.
On Tuesday, groundnut oil loose traded in the range of Rs 1135-1140 per 10 kg, while the price for 15 kg new tin stood at around Rs 1890-1900, up by Rs 10 a tin. Groundnut prices have increased over the past one month to Rs 72,000-72,500 per tonne. The arrivals of groundnut at the Gujarat markets remained at around 17,000-20,000 bags per day.
"Groundnut oil industry is in awful condition. This year is very crucial for us as since the beginning of the oil year, we are facing shortage of groundnut for crushing. When price goes up, everybody blames millers but there is nothing we can do as we have no stock to crush," said Samir Shah, president, Saurashtra Oil Mills Association (SOMA).
"It is not in our hand to control groundnut oil prices as production is less than the demand. Most of the working oil mills are trying to buy groundnut but all the arrivals are consumed by peanut traders for export purpose," said Suresh Kaneriya of Kaneriya Oil Industries.
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"At present mills produce about 80-90 tonne of groundnut oil against the demand of 150 tonnes," he said.
Raising concerns about falling groundnut availability, Ravajibhai Mandanaka, president, Gondal Oil Mills Association informed, "If the present situation will continue, price of groundnut oil may touch Rs 2200 per tin in two month." "The price of groundnut is also not viable to us. Small millers are inactive presently and some of them shifted to other oil," he said.
Rajesh Bheda, president, Indian Oilseed and Produce Export Promotion Council (IOPEPC) said, "Domestic use as well as export of groundnut has increased in past one year. We are expecting over 450,000 tonnes of groundnut export in current financial year."
Meanwhile, the IOPEPC stated that India has exported 384,000 tonnes of groundnut during April-October 2011. In 2010-11, country's total groundnut export stood at 419,000 tonnes.