Betting big on higher prices, coupled with good rains and improved water availability, farmers in Gujarat are making a record of sorts in groundnut cultivation — the area covered under the oilseed has so far touched an 11-year peak.

As per data from the Gujarat government’s agriculture department, groundnut sowing in the State has touched 18,27,519 hectares as on July 6, 2020. This is about 18 per cent higher than the three-year average of 15,40,078 hectares. It was last in 2009 that Gujarat had recorded groundnut cultivation on an area of 18.22 lakh hectares. All-India area under groundnut was 25 lakh ha as on July 3.

Farmer sources indicate that improved prices for the oilseed is the key factor for farmers turning to groundnut from other oilseeds such as castor and fibre crop of cotton. For the most part of the last year, groundnut prices in the spot markets have hovered above the minimum support price (MSP) of ₹5,090 per quintal for 2019-20. On Tuesday, groundnut (bold) prices quoted at ₹5,555 per quintal at Gondal market. For the current kharif season 2020-21, the Centre has hiked the MSP to ₹5,275 per quintal, which is making the oilseed more attractive to farmers. The current spot prices, however, are off the recent peak of ₹6,255 per quintal in the past season.

Higher off-take

According to a Gujarat government district agriculture officer from one of the districts in Saurashtra — heartland for groundnut — of the key kharif crops such as cotton, groundnut and castor, farmers found better price prospects in groundnut, looking at its export potential and off-take as compared to the other two commodities, which have struggled for most part of last year with suppressed prices.

Recent data released by the Agriculture and Processed Food Exports Development Authority (APEDA) showed groundnut shipments were up sharply for the year 2019-20. The data showed groundnut exports jumped 51 per cent to $716 million ($474 million in 2018-19) on growth in volumes and pricing due to improved demand from countries such as Vietnam. Groundnut shipments jumped to 6.64 lakh tonnes for 2019-20 as against 4.89 lakh tonnes reported in the previous year.

This was not the situation with castor and cotton, for which farmers are believed to be holding unsold stocks of the previous season. Spot castor prices hovered at ₹3,830 per quintal as against ₹3,620 per quintal in June. However, in December 2019, prices hovered at ₹4,379 a quintal, which was lower by 15-18 per cent over the previous year.

The State, which is the largest grower of castor, has seen kharif castor cultivation abysmally low at 1,927 hectares as on July 6 as against the three-year average of 6,23,291 hectares.

Cotton, on the other hand, has been in the grip of a glut situation following the unsold stocks piled up at each level of the value chain, from ginned cotton to yarn to textiles and garments. Spot cotton quoted at ₹3,880 per quintal, which is much lower than the MSP of ₹5,515 per quintal for medium staple quality. As per Gujarat government data, cotton cultivation is completed on 18,25,276 hectares, which is about 32 per cent lower than the three-year average of 26,72,892 hectares.

Related Topics