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    Market Trends


    © International Trade Centre, International Trade Forum - Issue 1/2001 

    The world's food system is changing fast under the influence of population growth, the globalization and concentration of world economies and scientific advances. These changes also affect those involved in trading groundnuts.

    Product quality 

    With competition high, exporters cannot afford to neglect issues related to groundnut quality and public health concerns. Quality is the key to being chosen as suppliers. This translates as being able to provide, on a regular basis, the required quantities of groundnuts, meeting quality specifications and standards that reflect both consumer health concerns and manufacturers' needs for further processing into food products.

    The most appropriate definition of product quality - fitness for a given purpose or use - implies two major challenges for groundnut exporters:

    Meeting consumer demands 

    It is the buyer's perception of quality that matters, not that of the seller. The best quality product offered by the supplier is not always best for the buyer's use. The biggest "quality challenge" is to develop and grow groundnut varieties that meet the consumer's demand. This requires a basic awareness and shift of attitude among exporters, as well as investment to develop new seed varieties and grow them.

    Meeting food safety requirements 

    Quality specifications and requirements exist for various groundnut products. Non-compliance to quality specifications and requirements in importing markets leads to costly rejections or claims and could result in the banning of trade with the non-compliant origin.

    The biggest groundnut quality challenge to food safety is to control the content of aflatoxins, cancer-causing chemicals produced by a mould that can contaminate the crop. Producers and exporters need to prevent or control the contamination throughout cultivation, pre- and post harvesting stages and to certify their products at origin.

    Concentration and consolidation of the food industry 

    There is an overall trend towards fewer and larger food companies (growers/producers, processors and traders/wholesalers/distributors/retailers), with extended market power and enhanced capacity to face market competition. Mergers, joint ventures and economic alliances are accelerating. Competition for market shares is higher as a result.

    This competition is driving the food industry to move from a predominantly supply-driven system to a consumer-driven one. Consumer preferences and health concerns consequently have a more important role in food markets than they did in the past.

    Demand for groundnuts will continue to be sustained by consumer preferences towards convenience foods and eating out, as well as growing interest in "healthy" foods and diets.


    Consolidation means that importers ask for larger supplies and more strict specifications and quality requirements than in the past. Medium to large exporters will have the edge, as they will be more likely to supply substantial shipments at reasonable prices without interruptions because of quality or service concerns.

    Groundnut exporters in developing countries should reposition themselves in the emerging high-risk, more competitive and volatile world markets, by defining long-term export development strategies focusing on market differentiation and by developing strategic alliances with selected market players.

    The two keys to their successful positioning in the market are better relations with importers, food manufacturers and processors in the consumer markets, and reliability of competitive supplies of quality products meeting consumer requirements.

    Globalized food markets 

    Food markets are becoming global, fuelled by advances in communications, transportation and technology, as well as growing market transparency, harmonization of commercial laws and market liberalization measures taken by an increasing number of developing countries.


    International and intra-regional trade will increase and new export opportunities will open up for groundnuts. On the other hand, edible groundnuts are expected to face increased competition from tree nuts in the manufacture of food products.

    Impact of scientific advances 

    Internet use and electronic commerce in food products are expanding rapidly, encompassing market monitoring and promotion; electronic networking of producers, processors, traders and consumers; and scanner-based software systems for tracking consumer preferences and demand. Biotechnologies are reshaping production efficiency and increasingly contribute to adapting products to specific end-uses.

    In the groundnut sector, research programs undertaken with the support of international research organizations and international donors have led to improved varieties and the establishment of regional groundnut gene banks and databases.


    Appropriate government policies, measures to encourage national seed multiplication and the distribution of improved seed varieties to farmers will allow the business communities and the small-scale farmers to benefit from these developments.

    Rapid population growth, economic development of emerging markets 

    The average annual Gross Domestic Product of developing countries grew in real terms throughout the 1990s - two to three times faster than the global average, according to "The Least Developing Countries 1998 Report" of the United Nations Conference on Trade and Development (UNCTAD). This trend is expected to continue in the coming years. At the same time, world population is expected to more than double over the next fifty years and global caloric intake, too, will more than double. Developing countries will see 75% of this population increase and 100% of the growth in caloric intake.


    Demand for groundnuts will increase, in particular in developing countries, where people are expected to spend more on this staple food.