Source: Business Standard
The deficient rains last year and a 37% rise in minimum support price (MSP) had led to a steep rise in prices from August. With new regulations restricting exports, prices fell from January. As Indian groundnut was not globally competitive, weaker demand led to further downward pressure on prices. With good rains, Gujarat (which accounts for almost a third of the crop) has seen 100% sowing after two years. This year, the crop should recover to high levels of output.
The MSP for 2013-14 has been set at Rs.4,000 a quintal, 8% higher than last year’s. The all-India average wholesale price of packed groundnut oil that had been rising since 2009 peaked at Rs.12,609.56 a quintal in February, and declined to Rs.12,114.44 a quintal in July. The trend seems set for lower prices this year.
IPM data till week ending July 27. The Indicus Price Monitor (IPM), a product of Indicus Analytics Pvt Ltd, tracks real-time wholesale prices for 60 agricultural products from 3,000 mandis. Due to differences in methodology, the IPM levels differ from the corresponding Wholesale Price Index (WPI). Broad trends are in sync.