The groundnut trade in North Gujarat currently faces a chill, with stagnant local and export markets leading to a surplus of over 40 percent in old stock. Despite a notable increase in groundnut prices, the market lacks the vigor witnessed in the previous year, resulting in losses for stockists.
Understanding the Price Trends and Lost Opportunities
Fluctuating between $1,24 to $1,29 or €1,14 to €1,19, groundnut prices have been on a rollercoaster ride. While most factories in Banaskantha remain closed, anticipation lingers for increased export trade, contingent on reopening these dormant facilities. However, the Red Sea crisis has impeded new export deals, affecting the overall trade momentum.
Sowing the Seeds of Hope – Promising Summer Plantation
In the face of these challenges, a silver lining emerges in the prospect of promising summer sowing. Buoyed by favorable prices last year, farmers in North Gujarat are expected to increase the acreage of groundnut cultivation, setting the stage for a potentially robust summer harvest.
With the summer sowing season on the horizon, farmers in Banaskantha are gearing up for action. While groundnut planting is set to commence after February 15, the current stock surplus indicates a cautious market sentiment.
Export Challenges and Regional Impact
The conflict in the Red Sea has disrupted export routes and contributed to an increase in European prices, affecting export costs. Buyers grapple with losses, causing a slowdown in groundnut exports from Indonesia to Malaysia. The Red Sea conflict has cast a shadow on export routes, hindering the momentum of new trade. The absence of significant deals and subdued demand in the pre-Ramzan period paints a complex export scenario. Furthermore, China’s lack of interest in corn oil further adds to the export woes, leading to an overall lukewarm demand for groundnuts.
In Saurashtra, a region known for groundnut cultivation, a 40 to 50 percent reduction in seed demand is expected. Farmers’ reluctance to sow scattered fields due to wildlife threats signals a potential setback for groundnut farming in the region. As the groundnut market grapples with abundant stock, export challenges, and fluctuating prices, the trajectory of groundnut cultivation in North Gujarat hangs in the balance. The coming weeks will reveal whether the summer sowing season brings relief and resilience to this complex market scenario.
The groundnut market in North Gujarat grapples with challenges marked by stagnant local and export markets, causing a surplus of over 40 percent in old stock. Despite a notable price increase, the market lacks last year’s vigor, resulting in stockists’ losses. The fluctuating prices, delayed sales, and the Red Sea crisis affecting export routes paint a complex scenario. However, a silver lining emerges with the potential for robust summer sowing driven by optimistic farmers.