India’s peanut (groundnut) production is likely rise by three per cent during 2026-27 as a section of farmers may shift from cotton to the oilseed crop attracted by better realisations and stable demand, according to the USDA’s local office in New Delhi.

In its latest report, FAS (Foreign Agriculture Service) New Delhi (Post) has projected that India’s groundnut area is expected to rise by 2 per cent to around 5.7 million hectares (mh) during 2026-27, up from 5.62 mh in the previous year.

Supported by the adoption of high-yielding varieties and ongoing research, particularly in Gujarat, peanut output is projected to grow by three per cent to 7.75 million tonnes, reinforcing its position as a more remunerative alternative crop.

2% rise in crushing

The Post said this shift is set to reflect in the processing trends as groundnut crushing is expected to increase by around two per cent, driven by strong demand from both food and feed segments. Consumption of groundnuts has been rising as a household snack. Besides rising consumption for food, a projected nine per cent jump in feed use in key producing States, such as Gujarat and Rajasthan, is underpinning this growth. As a result, groundnut meal production is forecast to rise three per cent to 1.8 million tonnes, supported by demand for cost-effective, high-protein feed ingredients.

Further, the Post said groundnut oil output is also expected to grow by four per cent, with exports likely to rise eight per cent, led by sustained demand from China.

Cotton area to dip 2%

Groundnut production is set to rise, gaining area from cotton, with the area under the fibrecrop projected to decline by around two per cent as farmers prefer to plant more profitable crops such as groundnut and corn. As a result, the cottonseed production is expected to fall by one per cent to 9.9 million tonnes, with downstream impacts on cottonseed meal output, which is forecast to decline to 4 million tonnes.

At the aggregate level, however, the gains in groundnut production will not fully offset declines in other oilseeds. Total oilseed production for the marketing year 2026-27 is forecast at 41 million tonnes, slightly lower year-on-year, as farmers continue shifting away from soybeans toward more profitable alternatives. While overall crushing volumes are expected to remain steady at 34 million tonnes, total oilmeal production may edge down to 20.1 million tonnes due to lower soybean output, given its higher meal yield compared to other oilseeds.

Published on April 3, 2026