Also see the general “Grains & Oilseeds” Chapter.
Groundnuts (peanuts) are a high value crop that can be marketed with little processing but are extremely versatile and can be used in a wide range of products.
The oil made from them can be used for cooking and they can be used to make peanut butter. Oil extracted from the groundnut can also be used as raw material for manufacturing of soap; massage oil for polio patients; body, shaving and hair creams; and fluid diet which is used to physically strengthen patients and to sharpen their appetites before and after operations.
The oil cake which is by-product of oil extraction process is used to make glue for wood; animal feed; fertilisers and antibiotics.
Sources: The Groundnut Market Value Chain Profile at www.daff.gov.za.
2. International business environment
China is the leading global producer of groundnuts, and contributes some 8% to world exports. India is second placed, with a healthy 37% contribution of exports. Nigeria is the top African producer of groundnuts, with the crop accounting for some 70% of that country’s export earnings. Other significant growers include the US, Sudan and Indonesia.
The National Peanut Board (USA) and Agricultural Marketing Resource Centre (AgMRC) websites contain helpful information about groundnuts. Visit http://nationalpeanutboard.org and www.agmrc.org/commodities-products/nuts/peanut-profile/ respectively.
3. Local business environment
The South African Grain Information Service (SAGIS), a not-for-profit company funded by, amongst others, the oilseeds industry, performs the information function. Statistics (e.g. crop estimates, export/import etc) may be found on the South African Grain Information Service website – www.sagis.org.za. Find the most recent Groundnut Forum presentation under “Presentations”. Find the Grading Regulations for groundnuts and requirements for grain exports at http://agbizgrain.co.za.
In South Africa groundnuts are traded for three main functions: for edible peanuts and peanut butter, for oil and oilcake, and for seed. Edible peanut consumption has been decreasing over time, while the market for peanut butter has remained steady. The local consumption requirements for groundnuts are around 63 000 tons per year. Of this, around 37% is consumed as peanuts. The rest is processed into peanut butter, oil and other products.
South Africa is usually self-sufficient in terms of groundnut production. Groundnut production has been on the decline since the mid-1980s though. Reasons include higher labour costs (this is a labour intensive crop) and slow seed-breeding developments. The Bureau for Food and Agricultural Policy (BFAP) has suggested that in terms of cultivar development, this country has been left behind by a number of major groundnut exporting countries. The 2016/17 crop, at 18 850 tons, was the smallest since 1945/46. This is attributed to the drought caused by the El Nino.
Groundnuts are mainly produced in the north-western regions of South Africa, namely the western and north-western Free State, Northern Cape and the North West Province. Groundnuts are also produced in Limpopo, Mpumalanga and KwaZulu-Natal but production is lower in these provinces.
In South Africa, production of groundnuts is usually higher than consumption. In the average year this translates to around a quarter of the crop being exported. Exports went to Mozambique and Japan. Other significant amounts went to the Netherlands and Belgium (SAGIS, 2017). Even though this is a relatively small proportion of the total crop, it is important for the profitability of the producers and primary processors. Phytosanitary requirements and quality standards must be adhered to and a Perishable Products Export Control Board (PPECB) certificate must also be obtained for groundnuts to be exported.
The domestic price is more or less on a par with the international price and is not influenced much by the size of the local crop. The key suppliers of groundnuts to South Africa recently, mainly as a result of the drought, have been Argentina, Brazil and Mozambique. India and Malawi are other significant suppliers (SAGIS, 2017). The import tariff for groundnuts is 10% of the fob price.
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