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Wednesday, December 02, 2020

Gujarat: Groundnut crop floods APMC yards, overseas demand keeps prices firm

These arrivals are significantly higher than the corresponding period in 2019 which saw a bumper harvest of groundnut in Gujarat, also the biggest producer of the oilseed in the country.

Written by Gopal B Kateshiya | Rajkot | Updated: November 5, 2020 1:59:43 pm
Agricultural produce market committees (APMCs), groundnut crop gujarat, apmc yards gujarat, gujarat news, latest newsTrucks loaded with groundnut line up outside the yard of Gondal APMC in Rajkot district . (Express Photo)

Agricultural produce market committees (APMCs) in Saurashtra region of the state are flooded with groundnut arrivals but the price of the oilseed crop has held firm with China aggressively importing the Indian variety.

The APMCs at Gondal, Rajkot, Halvad, Jasdan, Jamnagar, Amreli, Visavadar and Junagadh — the eight largest wholesale markets of groundnut – have already recorded cumulative arrivals of more than eight lakh quintals in the first two months of the Kharif marketing season of 2020-21. Around six lakh tonnes of the arrivals were recorded in October, generally considered the beginning of the groundnut marketing season.

These arrivals are significantly higher than the corresponding period in 2019 which saw a bumper harvest of groundnut in Gujarat, also the biggest producer of the oilseed in the country.

Despite the supply glut, the average price of the groundnut at Gondal APMC, the oilseed’s biggest market in the state that sets the benchmark price, the modal price (the price at which most of groundnut is sold) has been around Rs 5,000 per quintal, marginally lower than the government-fixed minimum support price (MSP) of Rs 5,275, but higher than around Rs 4,750 during the corresponding period last year.

In fact, prices at Rajkot APMC, the second biggest market of the oilseed in Gujarat, were ruling at the MSP level till last week, with some varieties like G-9 selling as high as Rs 6,500.

At Jamnagar APMC, the price touched the peak of Rs 7,000 as traders from Tamil Nadu went broke to secure G-9 variety stocks for being used as seeds for sowing. “More than 30 traders from Tamil Nadu are still camping in Jamnagar and are buying aggressively the smaller varieties… This has ensured that the prices of these varieties are still around Rs 6,000,” Tulsi Nandasana, a groundnut trader at Jamnagar APMC, said.

Groundnut is the second-most-important cash crop of Gujarat. Last year, the state government had estimated the groundnut crop size to be 45.03 lakh tonnes (lt) while industry bodies, like Saurashtra Oil Mills Association and the Solvent Extractors Association (SEA) of India, had pegged it at 30 lt and 32.5 lt, respectively.

This year, the state recorded sowing in record 20.72 lakh hectare, an increase of around 34 per cent as compared to the previous year. The First Advance Estimate of the state government has pegged the total groundnut production in the state to 54.64 lakh, whereas SEA has pegged it at 35.45 lakh.

The central government began procurement of groundnut at MSP from farmers of Gujarat from October 26 onward and, by Wednesday, it had procured total of 1.94 lakh quintal of the oilseed from 10,626 farmers. Notwithstanding the government intervention, APMCs in Saurashtra are struggling to cope with the arrivals of the oilseed on their yards.

Except for Halvad, Amreli and Visavadar, other APMCs are allowing farmers to unload their groundnut only once or twice a week as their systems are struggling to trade the large volumes. Both Gondal and Rajkot APMCs have been recording arrivals of more than one lakh bags (each containing average 30 kg of groundnut-in-shell) on days the yard opens its gates to farmers, generally once a week.

Despite the glut, prices have remained firm due to overseas demand, say market functionaries. “China has been aggressively importing groundnut oil this season. India has already exported an estimated 20,000 tonnes groundnut oil in recent months. This is helping the prices in the domestic market. The generally high prices of all commodities and groundnut oil finding traction among Indian consumers is also an important factor which is supporting the current price levels,” Atul Chaturvedi, president of the Mumbai-based SEA, said.

Navnit Kavathiya, an oil-miller based in Gondal, said import demand by China is influencing the prices in Gondal. “As China is importing groundnut oil big time, we are purchasing groundnut from APMCs anticipating the scenario is not going to change very soon,” Kavathiya said.

Niraj Adhiya of DNS Brokers, a groundnut exporting firm based in Rajkot says majority of peanut and peanut oil shipments from India are heading to China these days. “China is the single largest importer of Indian peanut and peanut oil these days. This could be due to the groundnut crop failing there due to flooding this year or it could be building reserves to see that country through in crises like war. As the African groundnut starts coming into market only from December, India currently is the major source for importers and this is helping prices in markets in Gujarat,” Adhiya said.

As per the data of the Union Ministry of Commerce and Industry, India exported 1.74 lt of groundnut worth Rs1572 crore in the April-August period this year. It is higher than 1.54 lt recorded during the corresponding period last year. China accounts for 4208 metric tonnes of import from India this year even as Indonesia (74,599 MT), Vietnam (30,742) Philippines (14861) and Malaysia (14790) imported the commodity from India in much larger quantities during the five month period.

Kishor Viradiya, president of SOMA, the Jamnagar-headquartered body of oil millers of Gujarat says prices of groundnut oil in domestic market is also helping. “The 15-kg tin was trading at around Rs2400 till around two weeks ago though it has now come down to around Rs2200. But with the Diwali festivities round the corner, cooking oil demand is expected to go up and therefore, it is likely that prices of groundnut will remain comparatively higher as compared to the last year,” said Viradiya.

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