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 exported. 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% of the world output 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 hand-picked selected groundnuts, mainly because of
the increase of the domestic consumption. India moved up to second
place; Argentina and Viet Nam doubled their shares, while exports
from the United States decreased slightly, facing strong
competition from Argentina.
World export trade averaged 1.2 million tons of groundnuts,
valued at over US$ 948 million per year over the last five years,
out of which nearly two-thirds was provided by developing
countries. About 80% of exports consisted of edible groundnut
varieties, with the remaining 20% of groundnuts used for
crushing.
International prices of edible groundnuts fluctuated widely over
the last decade, influenced by both market fundamentals and
seasonal factors.
Using groundnuts: Global consumption
patterns
To maintain or increase market share, exporters need to adapt
the type of groundnuts to consumer requirements.
About 48% of the world output is for food uses and 52% is
crushed, producing groundnut oil and cake. Consumption patterns
vary widely from country to country. In the United States, a fifth
of the crop is exported; 10% is crushed for oil; nearly 60% is
directly used in the manufacture of food products. Argentina and
South Africa, typical export-oriented groundnut producers, export
70-75% of their crop either as edible or oil nuts, or as processed
groundnut oil and cake. In Viet Nam, groundnuts are cultivated in
order to improve soil fertility, to break rice monoculture and to
provide additional income to farmers through exports.
Asian countries, particularly Indonesia, consume large amounts
of groundnuts as sauces (satay) and gravies. In the United States
and Europe, groundnuts are most frequently used as salted,
dry-roasted and speciality nuts (such as honey roasted, hickory
smoked or chilli-flavoured), snacks, or for the manufacture of
peanut butter, confectionery and chocolate-based products.
Matching export groundnut varieties and
end-uses
Different varieties of groundnuts are used for different food
products. The largest - red-skinned Virginia kernels - are used for
cocktail and salted nuts. The medium-sized Runner and the small
Spanish varieties are best for peanut butter, oil and candies.
Valencia variety, with long shells containing three-four kernels
each, are in demand for roasting in shell.
New breeding technologies have produced a range of improved
varieties, adapted for particular end-uses or to specific growing
conditions. Groundnuts with good shelling yields, high oil or
protein content, or particular kernel shapes and sizes have been
developed for specific end-uses. High-yield varieties have been
developed for specific locations, with characteristics such as
early maturation; resistance to drought, diseases and pests;
suitability for mechanized harvesting; adaptation to particular
types of soils or farming requirements.
ITC helps the groundnut sector to improve
exports
ITC has taken several steps to build awareness among local
business communities on how to improve groundnut exports. As part
of this process, ITC has carried out market research and
disseminated technical information that can help groundnut
exporters to better reach consumer markets. Last year, ITC
published a market survey on export opportunities for edible
groundnuts in selected European markets, HPS Groundnuts: A survey
of selected European markets. The publication also addresses
aflatoxin contamination issues, which are the root cause impeding
export development of groundnuts from developing countries.
Awareness campaign targets African business
communities
This research was followed up by a series of workshops in five
African countries - the Gambia, Mali, Senegal, South Africa and
Zimbabwe - selected because they already produce groundnuts, and/or
have potential to increase their exports. Cooperative farmers and
small land holders, seed producers and distributors, groundnut
processors and traders, agricultural credit banks, as well as
government officials in charge of agricultural and trade
development were brought together for two-day events, to discuss
practical ways to improve the quantity and quality of their
groundnuts products, and to adapt exports to increasingly stringent
import market requirements. Participants realized the benefits in
taking a series of coordinated actions to improve groundnuts
production and check its quality.
Common needs emerging from the meetings included:
• developing national and regional groundnut sectoral and seed
strategies that lead to increasing exports of edible groundnuts
matching end-user needs;
• implementing integrated aflatoxin management programmes,
covering all contamination-related issues, including mould
formation and spreading, detoxifying the product and routine
monitoring;
• encouraging regulatory measures to control the flow of
contaminated shipments in national and international trade, and
technical information and training in aflatoxin control and
prevention;
• establishing certified national quality control laboratories,
in charge of issuing export quality certificates;
• promoting exports through market prospecting and generic
promotion of national products.
Micaela Maftei is ITC Senior Commodity Officer. She can be
reached by at e-mail, or
by fax at +4122 730 0446.
Adding value to African exports
In line with technical assistance needs identified through these
seminars, ITC formulated a project aimed at improving income levels
of groundnut producers and exporters in the Gambia, Malawi, Mali
and Zimbabwe, by encouraging business communities to become more
efficient and focus on edible groundnut production for export. The
project foresees the following technical assistance activities:
• market development and promotion missions in target import
markets and the participation in specialized trade fairs;
• training in export quality control, management and
certification;
• development of export labelling and generic promotion
campaigns for products with specific origins;
• technical support to selected enterprises in quality
assessment, quality and yield payment systems adapted to specific
local conditions, forecast of output and efficient HPS groundnut
selection.
ITC welcomes readers' views on both the technical cooperation
activities foreseen by the project and interest of firms or
national governments in participating in this project.
Groundnut export information
This Forum article aims to raise awareness about the
possibilities of improving the quality and value of groundnut
exports from developing countries. ITC encourages readers to
reproduce this article locally (please send copies to the Editor,
Trade Forum, ITC, Palais des Nations,
1211 Geneva 10, Switzerland. E-mail: domeisen@intracen.org).