Agri Business

As groundnut area hits a record, trade pins hope on higher supply for crushing

Rutam Vora Ahmedabad | Updated on August 03, 2020 Published on August 03, 2020

Gujarat covers 20.4 lakh hectares as farmers shift from cotton, soyabean

At nearly 20.4 lakh hectares, groundnut sowing this kharif season in Gujarat has hit all-time high levels so far indicating an improved availability of the seed for the processing and crushing industry. The largest grower of the oilseed had reported sowing on about 14 lakh hectares in 2019.

The oilseed has also seen higher sowing in other States, taking the country’s groundnut acreage to 45.4 lakh hectares for kharif 2020. At 6.77 lakh hectares, Andhra Pradesh has seen more than double growth in groundnut sowing from 2.43 lakh hectares reported in 2019. The country’s second largest grower, Rajasthan has seen over 34 per cent rise at 7.06 lakh hectares from 5.25 lakh hectares in 2019.

Farmer sources revealed that most of the shift in groundnut crop has happened from cotton and soyabean, which were among the bad performing commodities last year from price point of view.

 

“The crop condition looks good at present due to fairly good widespread initial rains. We are waiting for the second spell of good rains to get higher yield. Groundnut had fetched better prices to farmers last year as yields were also good. However, a prolonged dry spell may spoil the prospects,” said Vitthalbhai Dudhatara, President, Gujarat Unit of Bhartiya Kisan Sangh (BKS).

Above MSP

Per the market sources, during 2019-20, the groundnut prices in Gujarat’s spot markets remained above the minimum support price (MSP) of ₹5,090 per quintal. Groundnut (Bold variety) at Rajkot APMC quoted in the range of ₹4,500-5,500 on August 1. The prices remained higher than the recently announced higher MSP of ₹5,275 for the season of 2020-21.

“This has lured the farmers over other crops including cotton and soyabean,” added Dudhatara. Cotton prices hovered in the range of ₹3,700-4,660 per quintal, as against the MSP of ₹5,515. Soyabean prices, too, quoted in the range of ₹3,280-3,455 as against the MSP of ₹3,880.

“There is still a concern on the climate side. We fear that despite having record sowing this year, we may not see a record yield as rains have taken a halt,” said Sameer Shah, President, Saurashtra Oil Mills Association (SOMA) - an oil millers’ body in Gujarat.

Trade attributes the higher groundnut prices to the increased exports and edible oil consumption. The recent DGFT data shows Gujarat exported about 4.7 lakh tonnes of groundnut till March 2020, higher from about 3 lakh tonnes in the previous year. Gujarat produced about 30 lakh tonnes of groundnut last year, with an yield of about 2,070 kg/ha as climatic conditions were supportive. Neither the trade nor the government have come out with crop projections as the sowing was still found to be underway at some pockets in the State.

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Published on August 03, 2020
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