The article discusses the factors influencing the price dynamics of peanuts and peanut oil in India. There are several key points highlighted:
Increased Peanut Production: The peanut production in Gujarat, which is India's largest producing state, is expected to see a significant rise this year, estimated to increase from 30-35 lakh tons to 42-45 lakh tons. This bumper harvest could lead to an oversupply of peanuts in the market.
Government Support Price: The Indian government has set the minimum support price (MSP) for peanuts at Rs 1357 per 20 kg (Rs 6783 per quintal). However, wholesale market prices are currently lower, ranging from Rs 1050 to Rs 1200 per 20 kg. Despite the lower prices, farmers are holding back their stocks, hoping for further price increases. The government’s procurement of peanuts at MSP could help ease market pressures but may also cause some price softening.
Weak Demand for Peanut Oil: There is weak domestic and export demand for peanut oil, putting pressure on millers. The export price of Indian peanut oil is currently around $900 per tonne, but exporters to African countries are offering it at lower prices (around $750-800 per tonne). The domestic price of peanut oil is around Rs 170 per kg but is expected to decrease by 5 to 8 rupees in the near future due to the weak demand.
Export Challenges: Indian peanut exports are facing increased competition due to higher production in countries like China, Nigeria, Sudan, and Ghana. These countries are offering peanuts and peanut oil at competitive prices, which is affecting India's ability to maintain its export share, particularly in the African market.
In summary, while there is a positive outlook for peanut production in India, the combination of weak demand, increased competition from other countries, and government intervention in the market is likely to soften both peanut and peanut oil prices in the coming months.