Prices of most edible oils, particularly groundnut oil soared by Rs 15 per 10 kg in a single trading day on account of acute shortage of ready stock.
Arrivals of groundnut oil from Saurashtra, a groundnut producing bowl of Gujarat, have remained almost nil over the past few days.
Groundnut oil in the Mumbai market soared to a new record high Rs 565 from Rs 550 quoted on Monday (Aug 17), registering a jump of Rs 47 within a week.
More From This Section
Marketmen are now of the view that due to the lower rainfall in select states, the groundnut crop estimates could be affected and be 10-15 per cent lower than those of the previous year.
Also, the demand for this premium oil has remained good following the ensuing festive season like Ganeshoshtav, Dashera, Diwali, etc.
The stock available is too short to meet the demand for this oil.
The arrivals of groundnut oil from Gujarat have remained almost negligible but the arrivals from other neighbouring states like Andhra Pradesh, Maharashtra have remained quite inadequate to meet the demand.
Arrivals from these states are put at about 50/60 tonne a day against its demand of about 120/130 tonne a day.
"The main cause of price rally in groundnut oil is the shortage of rainfall in groundnut oil producing regions of Gujarat mainly northern parts of the state.
The rains so far in these regions are not sufficient for the adequate sowing of the groundnut crop," said a dealer.
Another market player said that the imports are taking place in other soft edible oils, but not in groundnut oil.
There are two reasons responsible for it; one is that the prices of groundnut oil are already ruling high in the international market and the other is that the existing sweet smell in Indian groundnut oil is not found in the imported one.
"Consumers have to bear with the situation of higher prices of groundnut oil till the mid-October the arrivals of new crop starts," a market analyst said.
Now, groundnut oil hasbecome very fancy item which is mainly consumed by upper-middle class and the rich class.
India imported edible oils to the tune of 10.21 lakh tonne during the first nine months (Nov `97 to July `98) of the current oil year against 17.48 lakh tonne during the last whole oil year of 1996-97 (Nov-Oct).
Also, continuous depreciation of the rupee has pushed up the landed cost of imported edible oils which is also responsible for the upward trend in oil prices.