Riding on the back of shortage of groundnut and upcoming Janmashthami festival demand, prices of groundnut oil have reached to a new high of Rs 2,225 per 15 litre tin. After almost three years, prices have gone up constantly due to good exports of the oil also in this year.
As per the traders and millers, in current scenario, groundnut oil prices will increase further till new crop of groundnut arrives in the market and that will come after two months.
“The groundnut oil prices are increasing only because of shortage of groundnut for crushing. Mills have no stocks and in this condition matching the demand is not possible. On the other hand, next three months are full of festivals. Demand will definitely increase and prices may move up further to Rs 2,500 per 15 litres tin,” said Ravji Mandanaka, president of Gondal Oil Mills Association.
Benchmark wholesale prices of groundnut oil (loose) have reached Rs 1,450 per 10 kg, having increased by Rs 200 per 10 kg in last two months and. According to millers, wholesale prices may increase to Rs 1,700 per 10 kg in coming two or three months.
In retail, a new 15 kg tin of groundnut oil is being traded at Rs 2,225, having gained by more than Rs 80 per 15 litre tin during the current month in the retail market and rose about Rs 400 in past two months.
The other reason for the constant rise in groundnut oil prices is attributed to good export demand during March and April which was unexpected. Exporters have contracted about 15,000 tonnes export order from China in March this year.
Suresh Kaneriya, managing director of Kaneriya Oil Industries, said: "A sudden spurt in export demand for groundnut oil has pushed up prices since, the April this year. Moreover, because of weak production of Kharif groundnut has created scarcity of raw material for mills. While arrivals are short, most of the stock is consumed by the farmers."
Kharif groundnut production stood at 3.4 million tonnes in 2015-16 as against 4 million tonnes in India due to weak monsoon. However, this year, area of groundnut has increased as monsoon is good so far.
As per department of agriculture, government of India data, groundnut sowing has increased to 4.26 million hectares as on August 12 this year, higher by 32 per cent from 3.24 million hectares in corresponding period last year.