The Hindu Business Line : Mumbai trading adulterated groundnut oil?

FOR over four weeks now, groundnut oil prices in Mumbai - a major terminal market - are substantially lower than what is quoted at, say, Rajkot, a major producing centre.

While recorded trade in Mumbai is at around Rs 450 per 10 kg trading lot, at Rajkot the rates are considerably higher at Rs 495-500.

What started at the beginning of the new season as a small price differential between producing and consuming centres has now widened to over Rs 4,000 a tonne. Such a wide price differential is unheard of.

If anything, terminal market prices would normally be higher than those of production centres. Such a huge price difference should attract the attention of Government officials concerned with civil supplies and food quality. How this glaring price anomaly has escaped official scrutiny is a mystery. There is strong suspicion of adulteration of groundnut oil with cheaper edible oils. It has never been uncommon for the trade to blend the premium oil with cheaper oils such as refined palmolein to the extent of 5-10 per cent.

This season, there is a marked disparity between cost of imported oils and domestic market rate of such oils. Therefore, a larger share of cheap imported oil is going into adulterating groundnut oil, according to some observers.

Because of sluggish market conditions and slow offtake, there is considerable propensity to blend cheaper oils with a premium oil like groundnut oil. There could be no other reason for the market to rule at higher levels at the producing centre and at lower levels at consuming centre, traders stated.

One of the traders this correspondent spoke to argued that groundnut oil from Karnataka - which harvested a large crop of groundnut in the kharif season - flowing into Mumbai accounted for low prices here. But normally groundnut oil from the South flows into the Gujarat market where prices are attractively high.

Further probe revealed that two grades of groundnut oil are being offered in the market, with grade II quoted lower. Grade II is obviously adulterated groundnut oil. Grade I is scarcely available and priced higher (at Rajkot rate) because of its purity.

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