Prices of key kharif oilseeds such as groundnut and soybean have surged compared to last year, encouraging Indian farmers to expand their cultivation areas. As of June 5, soybean prices in Indore stood at ₹68,000 per tonne, significantly higher than last year's average of ₹43,396 per tonne, according to the Solvent Extractors Association of India. Groundnut prices in Saurashtra were ₹72,000 per tonne, up from ₹53,720 a year ago.
Price Drivers
The increase in soybean prices is attributed to a tight demand-supply situation. Current prices exceed the Minimum Support Price (MSP) of ₹5,708 per quintal set by the government for the 2026-27 marketing season. Groundnut prices, while higher than last year, remain slightly below the MSP of ₹7,517 per quintal.
Supply Side Developments
In Karnataka, soybean sowing has begun, with a notable rush from farmers to purchase seeds, particularly in districts like Haveri. In Gujarat, the largest groundnut-producing state, planting has expanded to 55,788 hectares as of June 8, compared to 31,110 hectares a year ago, according to the State Agriculture Department. Overall, oilseed sowing was reported at 0.42 lakh hectares as of June 5, down from 0.52 lakh hectares the previous year.
Demand Side Trends
Sanjeev Asthana, President of the Solvent Extractors Association of India, noted that sustained price realizations and improving market sentiment are likely to encourage further expansion of oilseed acreage. The Agriculture Ministry's data supports this trend, indicating potential growth in domestic production.
Price Outlook
The outlook for oilseed prices remains positive, with sunflower seed prices aligning with MSP support, now raised to ₹8,343 per quintal. This price assurance is expected to encourage further cultivation of sunflower alongside mustard. The upcoming kharif season could see significant expansion in oilseed acreage, supporting long-term production growth.
| Commodity | Current Price (₹/tonne) | Last Year Price (₹/tonne) | MSP (₹/quintal) |
|---|---|---|---|
| Soybean | 68,000 | 43,396 | 5,708 |
| Groundnut | 72,000 | 53,720 | 7,517 |
| Sunflower | 70,000 | - | 8,343 |
The expansion in oilseed cultivation is a critical development for commodity traders and procurement teams, as it may influence future supply dynamics and pricing strategies.
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