Groundnut oil price likely to go up in Gujarat

March 11th, 2008 - 9:21 pm ICT by admin  

Rajkot (Gujarat), March 11 (IANS) A shortage of groundnut oil is anticipated during the next 45 days in Gujarat as Rabi output of groundnut is expected to arrive in the markets only after that, market sources said. According to Purvang Vohra, a groundnut exporter, farmers in Saurashtra are holding about 250,000 to 300,000 tonnes of groundnut with them.

Currently, only 25,000-30,000 tonnes of groundnut reach the market yards of Saurashtra daily. Of this, 50 percent is bought by traders and the rest is taken by crushing mills. This is not enough for the mills to operate in full capacity.

Actually, only 15 percent of the 1,000 oil-crushing mills in the state are working now, said Ukabhai Patel, president of the Saurashtra Oil Mills Association (SOMA).

Oil crushing is a seasonal activity in Gujarat. Mills shut down and restart operations three times a year, depending on the crop arrivals in the market.

Market sources said the current situation could lead to a shortage of groundnut oil and result in a price rise. In the edible oils market Tuesday, the price of 15-kilogram tin of groundnut oil was at Rs.1,120 at Rajkot and Rs.1157 at Ahmedabad.

A tin of 10-kg cottonseed oil was selling at Rs.618 and 10-kg palmolein oil at Rs.614 at Rajkot, according to commodity exchanges sources.

In the past fortnight, there was a continuous rise in price due to lack of arrivals of groundnuts, soy and cottonseed. Concerned over the development, the Forward Market Commission (FMC) clamped lower circuit filter on all future contracts Monday.

Responding to the FMC’s step, traders postponed their purchases of edible oils, which led to a decline in edible oil prices. The price of 15-kg tin of groundnut oil has been reduced by Rs.30 in the last three days. The cottonseed oil lost Rs.35 and Palmolein Rs.60, sources said.

India consumes over 10 million tonnes of edible oils and imports more than five million tonnes.

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