Groundnut oil prices have reached close to Rs 2000 per 15 kg tin on Saturday even as demand stays grim from the millers. According to sources, groundnut oil mills have been more or less closed for past one month due to shortage of raw material, i.e. groundnut. On the other hand, export demand has pushed up groundnut oil price.
Groundnut oil prices gained Rs 20 per 15-kg tin at Rajkot markets and traded at Rs 1,985-1,990 per tin. Loose groundnut oil rose by Rs 10 per 10 kg to Rs 1180-1185 per 10 kg.
According to market sources, groundnut oil prices rose by Rs 60 per tin during past three days and about 50-70 tonnes of groundnut oil was traded across Gujarat.
"We have no choice but to close our mills as for past very long time, we are experiencing scarcity of groundnut for crushing. Hardly two or three mills are operational in Saurashtra area," said Ravajibhai Mandanaka, president of Gondal Oil Mills Association.
He further said, "All the groundnut arrival mostly gets consumed by the groundnut traders for export. The price they are offering to the farmers in the open market, are not viable for millers."
During past one week, groundnut oil prices have increased by Rs 3000 to Rs 76,000-77,000 per tonne in Saurashtra area on heavy export buying due to high demand mainly from China.
Currently, about 20,000-25,000 bags of groundnut arrive every day in Gujarat markets. Industry is not hoping much from the summer groundnut crop as last year experience was not good.
"The prices have increased mainly because millers have no stock of groundnut for crushing. Most of the groundnut is absorbed in exports at present," said Samir Shah, president, Saurashtra Oil Mills Association (SOMA).
According to figures provided by Indian Oilseed and Produce Export Promotion Council (IOPEPC), 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. According to IOPEPC, India may export over 500,000 tonnes groundnut in 2011-12.
Meanwhile, A Jamnagar-based oil miller, who is also close to Saurashtra Oil Mills Association (SOMA) said, "Instead of producing oil, most of the millers’ have now started trading of groundnut as they get more money in it."
Mandanaka further informed, "Most of the summer groundnut crop had been consumed by exporters due to high export demand and this year also we are not hopeful to get it for crushing as we are expecting good demand in export." A Rajkot-based edible oil retailer informed that groundnut oil buying has dropped significantly due to exorbitantly high prices. "Most of the groundnut oil users have shifted to other edible oils like cotton oil, palm oil and sunflower oil," he maintained.
Millers and traders see little possibility of groundnut oil prices coming down in near future.
