After the central government’s decision to allow export of edible oil in consumer packs, groundnut oil prices have seen a sharp jump of over 8% to Rs 1,895-1,900 per 15 kg tin in Gujarat on anticipated export demand.
Moreover, the availability of groundnut remained tight for crushing as most of the stock was consumed for peanut trading. However, the retail demand in the domestic market remained weak.
The Cabinet Committee on Economic Affairs (CCEA) gave permission to export edible oils in branded consumer packs of up to 5 kgs, with a ceiling of up to 20,000 tonnes per annum, with effect of October 1, 2012, to meet the increasing demand from Indians living abroad.
“Groundnut oil export was restricted for last one year and after recent permission from the government, we are expecting good demand to prop up from overseas markets. As the festival time is set to begin, we expect retail demand to come up soon in the market,” said Suresh Kaneriya, managing director of Kaneriya Oil Mills.
“This may not let groundnut oil to go fall from the current levels at least for some time,” he added.
Groundnut oil prices increased by Rs 150 per 15 kg tin during Friday and Saturday and traded at Rs 1,895-1,900 per 15 kg tin. It may be mentioned here that groundnut oil price had declined by more than Rs 300 per tin over the past one month due to poor demand.
On Saturday, loose groundnut oil had gained by Rs 100 to trade at Rs 1150 per 10 kg on Saturday while groundnut oil teliya tin moved up by Rs 149 to Rs 1,759-1,760 per 15 kg. About 40-50 tonnes of groundnut oil was traded from Saurashtra’s mills.
On the other hand, as this year groundnut crop has almost failed in Gujarat due to poor monsoon, arrival of groundnut would be very poor.
Currently, about 8,000-10,000 bags of groundnut arrive every day in Gujarat. Out of this, 5,000-6,000 bags are new crop. New groundnut is traded on Rs 1,000-1,050 per 20 kg.
Ravajibhai Mandanka, president of Gondal Oil Mills Association said, “At present, most of the arrival of groundnut is consumed by peanut traders and stockiest. Mills have very low availability of groundnut for crushing. Moreover, price of new crop is high, which has increased the production cost.”
Due to lower availability of groundnut, hardly 25-30 groundnut oil mills are operational in Gujarat. The consumption of groundnut oil has reduced by 40% over a period of time mainly due to health concerns and unstable prices. However, still higher income groups in Gujarat and Maharashtra continue to prefer groundnut oil over others.
According to Kaneriya, groundnut oil prices may exceed Rs 1,200 per 10 kg by end of this month.
