Arrivals hit groundnut oil rates

Groundnut oil prices have slipped in the wake of better arrivals and good groundnut production in Gujarat and other states. The festive demand has not been able to lift prices.

However, oil millers expect a rise in prices after Diwali, coinciding with the beginning of the crushing season. They also expect a surge in export demand, leading to an upswing in prices.

Prices of groundnut oil have slipped to Rs 620 per 10 kg from Rs 720-750 a few days ago. They had shot up to Rs 800 per 10 kg a month ago, triggering a major political controversy. The Gujarat government had to intervene and release imported palm oil into the market to control the soaring prices.

"Prices have slipped because of better groundnut arrivals in the markets," said Bipin Patel, a former president of the Solvent Extractors' Association of India and Junagadh-based oil miller.

Most of the oil millers expected a high export demand from the US next month as the peanut crop there had been hit, said a trader from Rajkot.

"The groundnut production in the state is likely to touch 20 lakh tonnes this year. The excess production will enable better exports," said Ukabhai Patel, president of the Saurashtra Oil Millers' Association (Soma).

Last week, after the Soma's annual meeting, around 500 oil millers of the association had decided not to lower prices Rs 1,100 per 15 kg. However, the president has retreated from the earlier decision.

Output estimates of the kharif groundnut are expected to touched almost 20 lakh tonnes against the last year's output of 16 lakh tonnes. The country's total estimated output is likely to be around 55 lakh tonnes, with Gujarat accounting for 20 lakh tonnes and 16.5 lakh tonnes coming from Andhra Pradesh.