The Hindu Business Line : Fresh inflows driving down groundnut prices

GROUNDNUT prices may rule lower in the next few days in anticipation of an increase in fresh inflows in Gujarat and Karnataka, despite reports of good domestic demand.

After having risen by over Rs 100 per quintal recently, groundnut prices in Gujarat have fallen by about Rs 50 a quintal as fresh arrivals showed a substantial improvement in the past few days.

"Fresh inflows in Gujarat have almost reached 1.5 lakh bags per day (each of 40 kg) from an average 80,000 bags in the past fortnight while inflows in Karnataka have also increased to 45,000 bags a day," a Rajkot-based trader said.

Major inflows were reported in the Saurashtra region. Gujarat and Karnataka are the major producers of groundnuts.

Groundnut bold prices in the State were ruling lower at Rs 2,800 per quintal for 40-50 count grade and Rs 2,700 per quintal for 50-60-count grade.

Seed inflows in the State may reach its peak immediately after Diwali festival and seed crushing would also start as market resumes after Labh Panchmi.

"Domestic seasonal demand for groundnuts is good all over the country. However, export demand is limited. In Karnataka, there is good offtake by farmers of Andhra Pradesh and Tamil Nadu for planting purpose," a local broker said.

Groundnut crop in Gujarat is expected to be around 19-22 lakh tonnes and the total crop size in the southern region may reach 28 lakh tonnes, according to trade estimates.

"Following increased inflows of seeds in Gujarat, forward prices of raw groundnut oil are ruling lower at Rs 475 per 10 kg for November 15 delivery," he said.

Raw groundnut oil (loose) prices at the Rajkot market have fallen to Rs 500 for 10 kg from last week's level of Rs 525 per 10 kg, despite ongoing seasonal buying, a trader said.

Groundnut oil (tin) prices had also fallen by Rs 40 to Rs 770 per 15 kg in last four days. Groundnut oil prices were up about 17 per cent this year.

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