Peanut Market News February 09, 2019
National Agricultural Cooperative Marketing Federation of India (Nafed), the government-funded farmers’ cooperative, has decided to restart auctioning of groundnut on Monday, following completion of procurement for the current season.
The agency has announced closure of procurement of groundnut early this week in most mandis due to lack of arrivals. Nafed procured around 668,486 tonnes of groundnut worth Rs 3,269 crore for the current season and is carrying over an inventory of around 300,000 tonnes worth around Rs 1,500 crore.
“We are planning to restart the sale of kharif 2017 and 2018 groundnut in Gujarat, Rajasthan, Uttar Pradesh and Madhya Pradesh on February 11,” said a senior Nafed official.
The auction of kharif 2017 and 2018 groundnut was suspended a few months ago due to the fear of a weak response, exacerbated by a sharp fall in prices. Prices of groundnut in shell declined in October 2018, to trade at around Rs 4,300 a quintal, which is sharply lower than the minimum support price (at which Nafed procured for the season 2017-18) of Rs 4,450 a quintal (including Rs 200 a quintal as bonus).
Prices have now recovered to trade intermittently at above MSP for 2018-19 of Rs 4,890 a quintal. After hitting the spot mandis at Rs 5,000, groundnut lost steam again to trade at Rs 4,900 a quintal in the benchmark Ahmedabad market. As a result, Nafed is set to gain from groundnut sales at market-driven prices.
To intensify the sale of the produce, Nafed has convened a meeting of traders, stockists, processors and millers on February 9 in Junagadh, Gujarat, to discuss operational difficulties faced by domestic processors and exporters.
“Nafed needs to address operational difficulties faced by stockists, processors and oil mills. Firstly, bags containing deteriorated quality of groundnut in the stack should be replaced with good quality produce. Since, the full value of auctioned goods is taken in advance, Nafed should allow us to lift good quality groundnut. Secondly, it should give us some leeway in lifting of auctioned goods. Sometimes, trucks are not available for lifting of goods. On other occasions, lifting is delayed for reasons beyond our control and for which auction winners have to pay extra storage cost. Such fundamental issues need to be addressed on priority,” said Sanjay Shah, Chairman, Indian Oilseeds and Produce Export Promotion Council (IOPEPC).
Trade sources, however, believe groundnut prices may move further up in coming months due to lower acreage and, therefore, forecast a proportionate drop in output this season. Data compiled by the Hyderabad-based Directorate of Oilseeds Development showed total acreage under groundnut declined by nearly 25 per cent to 464,000 ha as on January 31, 2019, from 600,000 ha around the same time last year.
Industry sources estimated a near 25 per cent drop in groundnut output as well. Given that kharif sowing and groundnut output was estimated to remain lower at 6.33 million tonnes for 2018-19 as per the First Advanced Estimate last September and lower acreage of rabi sowing this year, overall groundnut output in India is slated to remain at 7 million tonnes for 2018-19 compared to 9.2 million tonnes the previous year.
According to Shah, the current groundnut price in India is nearly 10 per cent higher than the prevailing price in the international markets. Hence, India’s groundnut exports stand unviable. India exports around 0.5 million tonnes of groundnut every year.