From peanuts, but no longer worth peanuts for sure! Meet India’s most expensive cooking oil

Move aside Olive oil, Canola Oil and all other varieties of cooking oil considered high-end or premium. A very unassuming variety of cooking oil has recently taken over the mantel of India’s most expensive edible oils. Groundnut oil has become the most expensive cooking oil in India, backed by growing consumption of peanuts as table nuts in the form of savouries, as an accompaniment with liquor, snack bars and rise in exports.

Reflecting the rise in demand, farmers are expected to increase groundnut planting by about 15% to 20% in the current kharif season.

Technically speaking, sesame oil is the most expensive vegetable oil in India. But since it is used in very small quantities for direct cooking, groundnut oil remains the most expensive.

The wholesale rate of groundnut oil is Rs 90 per kg while sesame oil is Rs 125 per kg. The retail prices of both the oils are about Rs 135 per litre and Rs 250-Rs 280 per litre, respectively.

The rate of decline of area under groundnut between FY08 and FY14 was -1.5%; the output went up due to increase in productivity. "Direct consumption of peanuts as accompaniment with liquor has been growing as it is the cheapest nut," said BV Mehta, executive director, Solvent Extractors Association of India told the Economic Times.

"Groundnut has been increasingly used for direct consumption as table nut as it is the cheapest among all the nuts, but there's no commensurate increase in their production," said Kishore Tanna, chairman, Indian Oilseeds and Produce Export Promotion Council. According to the third advance estimates, India produced 66.4 lakh tonne of groundnut in the 2014-15 season.
According to the processing industry, the kernel yield is 70% of the total groundnut with shell. Thus the production of groundnut kernels in 2014-15 was 44.8 lakh tonne. Of this, 7 lakh tonne kernels went for exports, 7.5 lakh tonne for sowing, and 18 lakh tonne for direct domestic consumption.

As against groundnut, sesame sesame production is only 7.5 lakh tonne, of which 3 lakh tonne goes for exports and about 15,000 tonne for sowing, leaving a very small portion for production of sesame oil.

According to industry estimates, the area under groundnut had declined in 2014-15 to 37.25 lakh hectare from 43.20 lakh hectare in the year before. "Area had declined last year as farmers could not get even the minimum support price of Rs 4,000 per tonne," Mehta told ET.

This year, however, industry expects farmers to shift from cotton to groundnut, especially in Gujarat, which accounts for half the country's total groundnut production, followed by Andhra Pradesh and Tamil Nadu. Govindbhai Patel, managing director, GGN Research, a Rajkot-based brokerage firm, said, "The area under groundnut can increase by about 4 lakh hectare to 5 lakh hectare this year."

Indian peanut exports have increased to the Far East. According to Agricultural and Processed Food Export Development Agency (APEDA), groundnut exports increased from 5.35 lakh tonne in 2012-13 to 7.08 lakh tonnes in 2014-15. India ranks second in groundnut production in the world next to China.

But it is not the top exporter like the US as most of the produce is consumed locally. "We cannot enter the European market as we have not been able to deal with the issue of aflatoxin contamination," said a leading Mumbai-based exporter requesting not to be identified.

Apart from taste and price, nutritional parameters have been responsible for the growing consumption of peanuts.

(Courtesy: Thinkstock Images)