Magazine article International Trade Forum

Exporting Groundnuts

Magazine article International Trade Forum

Exporting Groundnuts

Article excerpt

Groundnuts, a staple food for many developing countries, deserves a closer look as an export commodity. Less than 6% of the world groundnut crop is traded internationally, with export sales averaging close to US$ 1 billion dollars per year. There is, therefore, scope for export growth in groundnuts.

Investing in groundnuts is a sustainable way to address the rising needs for both food and foreign exchange. Today's exporters face two major challenges: ensuring food safety by preventing and controlling mycotoxin contamination of products and adapting groundnut supplies to demand for varieties best suited to specific end-uses.

ITC is focusing its technical assistance activities in the groundnut sector on helping African producers and exporters meet these challenges. Micaela Maftei, an ITC Senior Commodity Officer, reports.

Groundnuts are widely cultivated as staple food in tropical and sub-tropical developing countries, providing a valuable source of proteins, fats, energy and minerals. Most of the world's groundnuts are produced and consumed in developing countries. Less than 6 % of the world production is ex- ported. Most of the edible groundnuts are not cultivated for export purposes. In other words, producers do not usually grow the groundnut varieties best adapted to specific export market uses, such as the manufacture of roasted, salted or coated nuts, snacks, chocolate-- based products, or peanut butter.

Major producers

China took advantage of market reforms, as well as increased use of high-- yielding seed varieties and agricultural inputs (fertilizers, pesticides, insecticides, mechanization and irrigation), to recently overtake India as the world's largest groundnuts producer. In China, over 3.6 million hectares are under groundnut cultivation and 6 million tons are produced yearly. India is the second largest producer, with surfaces under the crop exceeding 8 million hectares and outputs averaging 5.6 million tons per year. The United States, Nigeria, Argentina and Indonesia are the following largest producers, with annual outputs varying between 1 and 1.5 million tons per year. Groundnut production in African countries fluctuated greatly, though it never exceeded 8 oh of the world out- put over the last decade. Yields per hectare are low, because of a combination of factors: unreliable rains; mostly non-irrigated cultures; small-scale, traditional farming with little mechanization, outbursts of pests and diseases and use of low-- yielding seed varieties; and increased cultivation on marginal land. Political instability and the frequently unsupportive oilseed policies have also played their role.

Yields vary

Yields in producing countries vary significantly, depending on climate, soil, farming systems and seed varieties. The spectrum is wide: over 2 tons per hectare (t/ha) in the United States; 1.8-1.9 t/ha in China and Argentina; about one t/ha in Indonesia, Brazil, Thailand, Viet Nam, Mexico, South Africa and Myanmar; and only 0.5-0.7 t/ha in the other African countries and in India (the second largest producer).

Trade is concentrated

Both export and import trade in groundnuts is very concentrated.

Exporters

The seven largest net exporters of groundnuts supplied about 87% of the world export trade in 1997/98: Argentina (245,000 tons); India (240,000 tons); United States (230,000 tons); China (185,000 tons), Viet Nam (98,000 tons); South Africa (40,000 tons) and the Gambia (20,000 tons).

Importers

Similarly, the five largest net importers purchase about three-quarters of current world imports: European Union (42%); Indonesia (13%); Canada (8%); Singapore (5 %); Malaysia and the Philippines (3 % each).

The positioning of the largest net exporters has shifted considerably during the last six years. China, although it has become the largest producer, lost over half of its shares in the export market of handpicked selected groundnuts, mainly because of the increase of the domestic consumption. …

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