India's groundnut bowl is shrinking, both in terms of the area under cultivation and the yield.

On stake is the survival of more than 800 oil mills in the Saurashtra-Kutch region, which accounts for 35 per cent of the country’s total production of five million tonnes of groundnut oilseed.

The slide began a couple of years ago, and this season, the plummet was steep and unchecked. The scanty rainfall has accounted for an all-time low yield this season.

The Saurashtra Oil Millers Association (SOMA) estimate the fall at over 45 per cent, which is now likely to hasten the en masse closure of mills, with groundnut oil prices expected to touch Rs 1,500 per 15 kg by Diwali.

“Owing to the shortage of kernels, groundnut oil prices are likely to touch Rs 1,500 by Diwali,” said SOMA president Ukabhai Patel. At present, groundnut oil costs Rs 1,100 per 15 kg. SOMA secretary Samir Shah said, “More than three out of four of the 800 mills will remain shut this season.”

With only 25 per cent of mills likely to reopen the coming season, SOMA wants the government to lift the ban on groundnut exports in a bid to encourage the cultivators.

Gujarat, Andhra Pradesh and Karnataka are the major producers of groundnut oil in the country. The coastal belt of Saurashtra tops this list. Besides, groundnut is also grown at Vadodara, Bharuch and Surat districts.

At its Annual General Meeting on Sunday, SOMA estimated groundnut yield this season to be between 9.5 to 10 lakh tonnes, 45 per cent less than the 17 lakh tonnes yield in the previous year.

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