Cotton shift to hit groundnut output

A major shift towards the cultivation of cotton from groundnut in the Saurashtra region is set to severely affect edible groundnut oil production.

Besides, a rise in consumption of groundnut and booming exports of hand-picked seed (HPS) groundnut have impacted the supply of groundnut to edible oil mills across the region, raising the possibility of a steep rise in prices of edible groundnut oil.

"Since November 1, at least 1 lakh bags of groundnuts, each bag comprising 35 kg, have arrived in the markets," said Sunil Kanani, a trader at Rajkot APMC.

However, a majority of the arrivals have either been booked for exports or for domestic consumption, with the upper prices of groundnut kernels quoting at around Rs 460 a quintal and the HPS groundnut ruling in the range of Rs 395 a quintal. This pricing factor has impacted the supply to edible groundnut oil mills in the region, added Kanani.

"There are at least 650 edible groundnut oil mills across Saurashra, of which hardly 150 are fully operational fully, owing to the pricing factor of groundnuts," said Khimji Gojiya, vice-president of Saurashtra Oil Millers' Association (Soma).

Soma had estimated a groundnut production of 16 lakh tonne in Saurashtra "" the groundnut bowl of the country "" with the national output from Andhra Pradesh, Karnataka, Rajasthan, Tamil Nadu, Maharashtra and the rest of Gujarat pegged at 40 lakh tonne.

But, the shift towards cotton cultivation has led to the output estimation being lowered to 36 lakh tonne, with Saurashtra's share at 13 lakh tonne, said Gojiya.

The low output and greater exports of groundnut will lead to a steep fall in output of edible groundnut oil at 5 lakh tonne from the estimated 12 lakh tonne.

The price of a 10 kg tin of edible groundnut is likely to touch the Rs 1,000 mark from the current level of around Rs 515, said Gojiya.