All varieties of groundnut like the Bold and Java experienced a price jump last week. Bold 40-50 increased from $1,31 per kg FOB to $1,33 per kg FOB while Java 50-60 increased to $1,44 per kg FOB from $1,42 per kg FOB last week and remained so for this week.
According to analysts, the groundnut price will remain stable and have a northbound trend due to the greater demand for the product from China and other international buyers. It is predicted that China will import a significant amount of groundnut from India during the new season from October. Though Senegal and Sudan are the main competitors to India in groundnut export, farmers feel comfortable because the former two countries’ crops won’t be available till December-January. As a result, India has the market open from October to December to export their product.
With the rise in the export demand from China last year for groundnut, the Gujarat farmers invested in large-scale crop cultivation. On average, the groundnut production area is 160 thousand hectares which have now increased to 200 thousand hectares. Furthermore, it has been reported that 40% of 330 thousand tons of groundnut produced by Gujarat was exported.
In the domestic market, there has been a significant rise in the demand for groundnut oil, which increased by 25% compared to last year. India also experienced five times more export of groundnut oil last year, which was about 225 thousand tonnes.
The increased domestic and export demand for groundnut and its oil resulted in the farmers not selling the products at Minimum Selling Price (MSP). This was the first time that groundnut farmers had this positive experience in the last four years. However, according to analysts, the market for groundnut will stay bearish as the export demand is there for the crop.
These factors indicate a giant windfall for the groundnut farmers in the market as the new crop hits in October.
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