Indian Peanut Market Firms Above Support as Oilseed Complex Tightens

Indian peanut prices in Gujarat have moved above the government support level, supported by strong mill demand and costly edible oil imports. Expanded summer sowing confirms farmer confidence, pointing to a broadly firm near‑term outlook with modest further upside risk if imported oils remain expensive. India’s peanut market is entering the summer with an unusual combination of tightness and confidence. Wholesale prices in Gujarat – the country’s key trade hub – have climbed above the Minimum Support Price (MSP) as processing demand holds firm and competing vegetable oils stay costly. Summer‑season sowings are up by nearly a third year on year, reflecting growers’ positive margins after a relatively strong last season. At the same time, imports of cheaper palm oil have dropped, tightening the overall edible oil balance and channelling substitution demand toward domestic oilseeds such as peanuts.

Prices & Market Tone

Wholesale peanut and peanut oil prices in Gujarat’s key markets, including Rajkot, have pushed above MSP this season, confirming a firm undertone. In Rajkot, loose peanut oil is quoted around EUR 1.65 per kg-equivalent (about EUR 164.99 per quintal), while tinned oil trades around EUR 1.89–2.14 per kg (EUR 28.37–32.08 per 15 kg), up roughly the value of INR 50 per tin week on week as summer demand for edible oils accelerates.

Physical kernel offers from India reflect this firmness: bold 40–50 count peanuts FCA Gondal are indicated around EUR 1.02/kg, with New Delhi bold 50–60 and 60–70 grades near EUR 1.03/kg and EUR 0.98/kg respectively. Java grades command a premium, with 50–60 count around EUR 1.17/kg and 70–80 count near EUR 0.95/kg. Brazilian raw peanuts stand slightly higher at roughly EUR 1.25/kg FOB, keeping Indian origin competitive for export.

Supply & Demand Drivers

On the supply side, India’s Ministry of Agriculture reports summer peanut sowing at about 551,000 hectares by 1 May, versus 420,000 hectares a year earlier – a sharp 31.2% increase. This expansion signals farmers’ willingness to commit larger areas on the back of last season’s relatively firm prices and the current move above MSP. In the near term, spot availability remains adequate, but forward supply expectations are clearly rising.

Demand fundamentals are equally supportive. Oil processing mills are buying actively, underpinned by robust consumer demand for edible oils into the summer months. Substitution dynamics within the broader oilseed complex are crucial: April 2026 palm oil imports fell sharply, with volumes down to roughly 505,000 tonnes, around 27% below March and the lowest since April 2025. Higher landed costs for palm and other imported edible oils are redirecting demand to domestic oils, including peanut and mustard.

Mustard oil has seen particularly strong offtake, with domestic sales in March–April 2026 running about 25% above the previous year at roughly 150,000 tonnes over the two‑month period. This strength in a key competing oil supports sentiment across allied oilseeds and adds a floor under peanut values, as refiners seek to diversify raw material intake and maintain crush margins.

Fundamentals & Weather Context

The fundamental balance for peanuts over the next 2–4 weeks is moderately tight. Stocks carried from the previous season are being drawn down steadily by millers, while the enlarged summer crop is still in the field and will not weigh fully on the market in the immediate term. With prices already above MSP, state-backed procurement is less active, leaving commercial demand as the main price driver.

Short‑term weather in Gujarat and other western Indian peanut belts is seasonally hot and generally favourable for ongoing summer crop development, with no widespread reports of acute moisture stress or flood risk so far. This supports the view that the enlarged sowing area will translate into higher production later in the year. For now, however, weather is a latent bearish factor for the forward curve rather than for prompt physical values.

Risks & External Influences

The upside risk for peanuts stems primarily from the imported edible oil side. If global palm or soybean oil prices remain elevated – or if logistical or policy shocks further curtail Indian imports – domestic crushers may lean more heavily on peanuts and other oilseeds, tightening spot availability and supporting further gains above current levels. Continued strength in mustard oil demand would reinforce this scenario.

The key downside risk is a sharp correction in global vegetable oil benchmarks, leading to cheaper palm and soyoil imports. Faster inflows could ease the current substitution demand for domestically produced oils and cap further peanut upside, particularly once the larger summer crop approaches harvest. A benign monsoon outlook and smooth crop progress would amplify this medium‑term bearish risk, even if near‑term prices stay firm.

Trading Outlook & Recommendations

• Short‑term (2–4 weeks): Market bias is mildly bullish to stable. Spot buying on dips above MSP appears justified for crushers and traders needing nearby coverage, given firm mill demand and still‑tight imported oil supplies.
• Producers: With prices above MSP, incremental selling into strength is advisable while retaining some volume for potential further upside if imported oil costs stay high or if domestic logistics tighten.
• Importers/Buyers: International buyers may find Indian bold grades attractive versus Brazilian origin; staggered procurement is recommended to manage currency and global oil price volatility.
• Risk management: Monitor global palm and soybean oil benchmarks closely; a sustained break lower would warrant reducing long exposure in peanuts or accelerating forward sales.

3‑Day Price Indication (EUR)