At the benchmark spot Rajkot market, groundnut in shells is quoted at Rs 3,750 a quintal, a decline of 17 per cent in the past one month and 11 per cent below the MSP. The price fall was largely attributed to estimates of a sharp increase in output, following better monsoon rain.
The government of Gujarat has appointed National Agricultural Cooperative Marketing Federation of India to procure 100,000 tonnes of groundnut from the open market. V R Patel, the latter's chairman, said, "After a small quantity, procurement was halted because of a labour strike in the state. We will start again."
SEA estimates India's groundnut output at 5.5 million tonnes this kharif, a 70 per cent increase from 3.23 mt the previous season. Groundnut is a 75 per cent kharif and 25 per cent rabi crop. Rabi output is also estimated to be higher, at 1.5 mt this year compared with 1.27 mt the previous season.
"Since harvesting has just begun, its price might decline further with the full arrival pressure. Hence, urgent government intervention is needed to win farmers' confidence," said Mehta.
As for soybean, bumper output estimates are expected to keep prices under pressure. It is currently Rs 3,000 a quintal, marginally above the MSP of Rs 2,775 a qtl, down by five per cent in the past month. The Indore-based Soybean Processors' Association (Sopa) has estimated output at 10.88 mt for crushing season 2016-17, from 6.93 mt the previous year.
"We will be revising the output forecast upwards on Tuesday," said D N Pathak, executive director, Sopa.
A long-term policy is needed to make India self-reliant, said an industry expert.