Peanut Market News April 11, 2018
Purchasing groundnut at minimum support price (MSP) is fast becoming a headache for the state government. Even as the government has purchased 8.40 lakh tonne of groundnut worth Rs 378 crore this year, the old stock of 88,000 tonne of last year lying in the godowns has been completely damaged and unfit for use. Disposing this stock, which is worth nearly Rs 37 crore, will again cost the government more money as there are no buyers for this stock that was procured by the National Agricultural Cooperative Marketing Federation of India Ltd (NAFED).
Another problem is selling this year’s 8.40 lakh tonne stock. Sources said the federation and the government are staring at huge loss this year too. NAFED V R Boda chairman told TOI: “The stock of old groundnut procured at MSP last year is completely damaged. We are not in the position to sell this stock because of its poor quality. Even the oil that would be extracted from this groundnut will be red and useless. The government will have to pay to dispose of this stock.”
Last year government procured 2.1 lakh tonne groundnut at Rs 844 per 20 kg, while market price was between Rs 550 and Rs 600 per 20 kg.
Last week, NAFED representatives discussed the issue with Saurashtra Oil Millers Association (SOMA) and traders. SOMA president Samir Shah said, “Government has not decided if they want to sell the stock or extract oil. Our millers will buy the stock at competitive rates if government decides to sell the groundnut.”
According to sources, oil millers are expected to put forward certain condition to buy the stock. “We have opinion from the market and oil millers who want to pay the amount in two installments. They will pay 50% booking amount and 50% after certain period and we will put the condition to take the possession of stock within 15 or 30 days of booking. However, the central government will take decision within five to seven days if government wants to sell the stock or extract the oil and the tenders will be invited accordingly,” Boda said.
However, SOMA claims that if government wants to sell this stock to oil millers, who have the capacity to buy and extract the oil, it would have to impose certain restrictions on the import of edible oil.
“From this 8.40 lakh tonne groundnut, nearly 25 lakh tonne edible oil can be extracted. Our country’s requirement is 204 lakh ton per annum. There are mills which are not functioning and other mills who extract other edible oils than groundnut. They will be willing to extract groundnut oil if this stock comes to market, but restriction of import of edible oil is a must,” Shah said.