Market Dynamics: Peanut Supply and Price Fluctuations

In Uttar Pradesh, the daily arrival of peanut bags has significantly increased from the usual 5,000 to between 7,000 and 8,000 today. The price for average quality peanuts is currently $57.60 per quintal, while high-quality batches are fetching $62.40. The recent price increase of $2.40 to $3.60 has now stabilized, with minor fluctuations expected.

Significant demand remains only in Gujarat despite substantial stocks held by stockists. Stockists, farmers, and mill owners collectively hold about 30% of Uttar Pradesh’s monsoon peanut stock. In Gujarat, oil demand is weak, impacting demands for peanut crushing from regional centers like Amreli, Godal, and Rajkot.

Impact of Environmental Factors and Crop Forecasts

This year has financially strained stockists who initially purchased peanuts at $72 per quintal and are now facing current prices of $60 to $62.40. Anticipations for price increases have not materialized, leading to excess inventories since Diwali.

Summer peanut planting has started near Mainpuri in the Dashek center, with harvesting expected to begin by late June or early July. This could yield between 200,000 to 300,000 bags daily, depending on the season's weather and rainfall.

Local Market Reactions and Future Projections

There are no significant export markets for Uttar Pradesh peanuts, with high-quality local peanuts priced at approximately $1.05 to $1.07 per kg. The demand from nearby states and international markets is low, contributing to reduced business activities.

Following a modest price increase of $0.06 per kg, peanut prices are expected to remain stable. New stable prices per kg are $1.19 for 50-60 count, $1.21 for 40-50 count, and $1.26 for 38-42 count peanuts. Despite recent significant trades, the lack of new demand suggests stable prices ahead.

Small export activities continue in southern states, although overall demand has been weak. China, a significant market, has reduced imports due to economic challenges, affecting global demand.

Concerns over water scarcity in Gujarat have reduced the prospects for advance monsoon planting. In contrast, Uttar Pradesh and Madhya Pradesh have seen a significant increase in summer peanut sowing, expected to be extensive compared to previous years.

Banaskantha district expects a strong summer peanut crop, potentially reaching between 45 to 50 lakh bags, up from last year's 32 to 33 lakh bags. Environmental challenges and pest concerns remain, but preparations for the upcoming monsoon planting are well underway.