Heavy Rains Could Slash Peanut Yields

Farmers across Saurashtra (a region in Gujarat) are dealing with delayed groundnut harvesting due to continuous rains. Especially in regions like Dwarka, Jamnagar, and Porbandar. While new peanut arrivals are being reported from areas like Una and Veraval, the unrelenting weather is causing challenges. There are concerns that if the heavy rains persist until October 20, peanut production could drop by 1 to 2 million tonnes. Farmers are holding back on harvesting fully ripened peanuts, waiting for clearer weather to avoid potential crop damage.

The peanut crop is currently estimated to yield 38 to 42 million tonnes, but this estimate could shrink if the rains continue. In some areas, up to 5-10% of the groundnut crops have already suffered damage. With around half of the peanuts arriving in markets like Veraval being of lower-quality Coca-Cola grade.

Particularly in Gujarat, the groundnut crop was initially estimated at 5 million tonnes, but recent rains and changing weather have reduced expectations to 4.2-4.5 million tonnes. If heavy rains continue, the crop could face further declines, especially in terms of Pilan quality peanuts.

Peanut Prices Drop as Farmers Hold Off on Harvest

If the region receives 10 to 12 inches of rainfall, farmers fear the peanuts may rot in the fields. Even moderate rain could cause approx half or a quintal reduction in yield per hectare. However, for now, the market has not seen a major price crash. Peanut prices have declined by approximately USD 0,12 per kg from the start of the season, with prices currently hovering around USD 0,30 per kg for new arrivals. Some premium varieties, such as Girnar and G-20, are seeing slight price drops, impacting overall market trends.

Interestingly, despite some damage, farmers are seeing high yields from varieties. Like Girnar, BT 32, and 28 groundnut, which are producing 3 to 3.6 quintals of peanuts per hectare. It is expected that yield may rise to 5 to 6 quintals as the harvest progresses.

Government Plans to Step In With Peanut Procurement

The government has announced it will start purchasing 0.7 - 0.8 million tonnes of groundnuts after Diwali, under its procurement program. Marginal farmers are expected to sell their crops before the festive season to meet immediate financial needs. Despite this support, groundnut prices have dropped, with Danavar groundnuts priced between USD 0,28 and 0,29 per kg, and Pilan quality groundnuts trading at lower levels.

Export Market Slows as China Waits for Better Prices

Foreign demand, particularly from China, has been weaker than usual. Chinese buyers are adopting a wait-and-see approach as Indian peanut prices remain higher than international rates. With the Indian crop yielding larger quantities, China's interest has waned for now. Still, the export market for peanut oil is seeing steady performance. The current demand stable in countries like Russia and the CIS nations.

In the export market, the 50-60 count Bold variety peanuts have been trading at USD 1,08 per kg, but prices are expected to fall by USD 0,20 - 0,30 per kg for peanuts and USD 0,30 - 0,40 per kg for peanut oil. 

Uttar Pradesh Sees Bumper Peanut Crop, Prices Stay Steady

Meanwhile, in Uttar Pradesh, peanut arrivals have picked up in the Jhansi region, with daily arrivals currently at 20,000 to 25,000 bags. This figure is expected to rise to 60,000 to 70,000 bags in the coming weeks as weather conditions improve. Prices for peanuts in UP are hovering around USD 0,39 to 0,45 per kg, with higher-quality dry peanuts fetching better prices in the local markets.

The peanut crop in Uttar Pradesh is estimated to exceed last year’s levels by around 25%. Altough there has been some damage to the crop. Experts predict that as new groundnut arrivals increase after Diwali, prices may decline by USD 0,01 to 0,02 per kg, with little chance of a significant rise in the near term.

Conclusion: Timing is Key for Peanut Sales

Given the current weather challenges and market uncertainty, farmers might want to hold off on selling their peanuts if they have the flexibility. Prices are expected to stay low with the increased arrivals. But there is some hope that demand could pick up after Diwali, providing slight relief.





Click here to reach our trading platfrom CMBroker