Groundnut oil bullish, but other edibles oil slip

Ahmedabad: The overall edible oil market is dull and prices are falling, be it palm or soybean oil. It is only groundnut oil whose prices are increasing because of short supply of groundnuts, observed Nirav Desai, Managing Partner of GNN Research.

According to Desai groundnut oil prices are seeing an upward trend because groundnut is in short supply for crushing. The reason is that out of the total production of groundnuts, approximately 60 per cent goes for table nuts, (groundnuts consumed directly by consumers), 8 per cent is used as seeds for cultivation, the rest 25 to 30 per cent groundnuts are available for crushing.

When the groundnuts production is down, short supply does not affect table nuts, it directly affects crushing. This year groundnuts production is 2 lakh metric tons less, so the crushing is less, which reflects in the prices. Groundnuts production is less and on the other hand exports are growing. That affects the groundnuts supply to oil millers. When less oil is produced it is natural that the price will increase, says Kishor Viradiya, president of the Saurashtra Oil Millers Association.