July 31 (Bloomberg) -- India’s peanut crop, the world’s second-biggest, is expected to slide after poor monsoon rainfall delayed planting, Oil World said, reversing its prior forecast for an increase.
The Indian groundnut crop may drop to 3.3 million metric tons in the 2012-13 season from 4.15 million tons in the previous year, the Hamburg-based researcher wrote in an e-mailed report. The outlook was cut by 1 million tons from earlier this month. The projected decline may result in higher vegetable-oil imports, Oil World wrote.
Rains were below average this monsoon season across more than half of the nation, according to the India Meteorological Department. Rainfall in the state of Gujarat, which accounted for more than 40 percent of India’s peanut area in 2011, was 46 percent of normal from June 1 to July 25, Oil World said.
“This year’s poor monsoon is depriving farmers of taking advantage of the record groundnut prices,” Oil World wrote. “Groundnut oil is still a popular cooking oil in India, but the huge price premiums, which are likely to persist with the deteriorated crop outlook, will continue to hurt consumption.”
On the wholesale market in southwest Gujarat’s Saurashtra region, peanut prices jumped 74 percent in the past 12 months, according to Oil World.
China is the biggest peanut grower, followed by India, Nigeria and the U.S., the researcher said.
Indian farmers had planted 2.55 million hectares (6.3 million acres) of peanuts as of July 26, compared with 3.31 million hectares a year earlier and a five-year average of 3.52 million hectares, according to Oil World. The crop is normally 70 percent to 75 percent sown at that date, the report showed.
“The ideal planting period is about to expire, leaving only little opportunity for sowing to catch up even with a late improvement of rainfall,” Oil World wrote.
Overall planting of the main-season peanut crop may be 3.6 million hectares, compared with 4.3 million hectares in 2011, according to the report.
The expected decline in production will cause a “steep” drop in peanut crushing, and the relatively high oil level of 41 percent in groundnuts means India’s vegetable-oil import needs will increase, the report showed.
“Under these circumstances the export ban on groundnut oil will most likely stay in place,” Oil World wrote. “Groundnut oil consumption in Europe has suffered in recent months from the high prices and the scarce export supplies.”
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