Groundnut Acreage Surges 9% to 46.82 Lakh Hectares as UP, MP Lead Kharif Expansion

India's groundnut cultivation area in the ongoing kharif season has expanded to 46.82 lakh hectares (lh) as of August 7, up from 43.11 lh at the same point last year — a year-on-year gain of nearly 9%, according to the latest Agriculture Ministry data. Notably, sowing has also nudged past the seasonal normal of 46.79 lh, signalling that overall crop coverage is on a firm footing.

The expansion has been driven primarily by Central and Northern states, where good monsoon coverage encouraged farmers to increase groundnut's share in their kharif portfolio. Two additional tailwinds reinforced the acreage push: the government's demonstrated willingness to procure at the minimum support price (MSP), and relatively firm mandi prices in the pre-sowing window that made the crop financially attractive.

The state-level picture is sharply divergent:

• Uttar Pradesh recorded the steepest rise, with area surging ~78% to 4.71 lh from 2.65 lh last year.
• Madhya Pradesh posted a 40% jump to 5.86 lh, up from 4.17 lh.
• Rajasthan climbed 11.9% to 10.82 lh (from 9.67 lh).
• Chhattisgarh grew 42% to 0.48 lh from 0.34 lh.
• Maharashtra added a modest 3.1%, reaching 1.35 lh.
• Andhra Pradesh remained nearly flat at 1.13 lh.

On the other side, Gujarat — the country's largest groundnut-producing state — saw acreage slip 3.1% to 19.78 lh from 20.42 lh, while Karnataka suffered a far sharper 44% decline to 0.82 lh from 1.48 lh, both attributed to rainfall deficits curtailing sowing activity.

A key structural factor behind the acreage expansion is the scale of government procurement during the 2025-26 season. Nafed bought approximately 11.22 lakh tonnes of groundnut under the MSP-based Price Support Scheme — with 10.46 lakh tonnes sourced from Gujarat, 0.39 lakh tonnes from Rajasthan, and 0.36 lakh tonnes from Uttar Pradesh.

For the current 2026-27 marketing season, the Centre has fixed the groundnut MSP at ₹7,517 per quintal. This floor price, combined with the lived experience of actual procurement in the previous cycle, has given farmers in key states the confidence to expand area without fear of a price collapse at harvest time.

While acreage data has buoyed supply-side expectations, wholesale mandi prices have already begun to soften in response. All-India average groundnut prices eased from ₹7,333 per quintal on July 15 to around ₹7,073 per quintal by early August — a decline of roughly ₹260 per quintal in under a month — reflecting the market's repricing of tighter supply fears.

The current mandi price remains below the 2026-27 MSP of ₹7,517 per quintal, which means the procurement safety net will be critical if prices weaken further at harvest. Traders should note that any significant further fall in mandi realisations could trigger another large-scale PSS procurement cycle, tightening open-market availability of groundnut and groundnut oil in the months ahead.

Despite the encouraging acreage numbers, analysts caution that the final crop outturn is far from assured. Rahul Chauhan of IGrain India noted that while remunerative prices and MSP procurement assurances have driven expansion in most states, it is the rainfall during mid-August and September that will now be the decisive variable for crop size.

For farmers and agri-businesses, this means the full picture on kharif groundnut supply will only emerge in early Q4 2026. A well-distributed late-season monsoon could consolidate the acreage gains into a strong output year; conversely, any prolonged dry spell — particularly in Gujarat and Rajasthan, which together account for the bulk of national production — could sharply moderate yield expectations and push prices back toward or above the MSP benchmark.