UNN-384

Groundnut HandbookCommodity Studies and Projections Division

Economic Analysis and Projections Department

January 1984 (i)

TABLE OF CONTENTS

Page No.

I. INTRODUCTION ........................................... I - 1

II. THE CHARACTERISTICS OF THE PRODUCT ................. II - 1

A. Edible Groundnuts .......................................... II - 1

B. Groundnut Oil ........................................... II - 2

C. Groundnut Cakes/Meals ...................................... II - 4

III. GROUNDNUT GROWING AND PROCESSING . . . . III - I

A. Groundnut Varieties ........................................ III - 1

B. Climate and Soil ........................................... III - 1

C. Cultural Practices ......................................... III - 2

D. Pests and Diseases ......................................... III - 3

E. Harvesting .. ......................................... III - 3

F. Drying ........................................... III - 4

G. Processing ........................................... III - 4

IV. THE WORLD GROUNDNUT INDUSTRY . . ........... IV - 1

A. Production . . ......................................... IV - 1

Yield .. ......................................... IV - 7

Supply Response . . ......................................... IV - 7

B. Consumption . . ......................................... IV - 8

Demand Response . . ......................................... IV - 11

C. Trade ........................................... IV - 12

Groundnuts . . ......................................... IV - 12

Groundnut Oil . . ......................................... IV - 14

Groundnut Meal . . ......................................... IV - 14

V. MARKETING AND MARKET PRICES .. V - 1

A. Marketing.. V - 1

B. Market Prices. V - 4

VI. SPECIAL ISSUES .. .................. VI - 1

A. Tariffs .................... VI - 1

B. Non-Tariffs .................... VI - 1

January 1984 (ii)

List of Tables

Tables Page No.II-Al COMPOSITION OF GROUNDNUT KERNELS ............................ II - 1

II-BI TYPICAL PERCENTAGES OF FATTY ACIDS BY TYPE .................. II - 3

II-B2 GROUNDNUT OIL--MAJOR END-USES, RELEVANT PROPERTIES ANDCOMPETING MATERIALS ....................................... II - 5

IV-Al GROUNDNUT AREA, PRODUCTION AND YIELD IN SELECTED COUNTRIES.. IV - 2

IV-A2 GROUNDNUT (OIL EQUIVALENT)--PRODUCTION BY MAIN COUNTRIESAND ECONOMIC REGIONS ...................................... IV - 3

IV-A3 GROUNDNUT (MEAL EQUIVALENT)--PRODUCTION BY MAIN COUNTRIESAND ECONOMIC REGIONS ...................................... IV - 4

IV-A4 OILSEEDS-ELASTICITIES OF SUPPLY ............................. IV - 8

IV-Bl GROUNDNUT (OIL EQUIVALENT)--APPARENT CONSUMPTION BY MAINCOUNTRIES AND ECONOMIC REGIONS ............................ IV - 9

IV-B2 GROUNDNUT (MEAL EQUIVALENT)--APPARENT CONSUMPTION BY MAINCOUNTRIES AND ECONOMIC REGIONS ............................ IV - 10

IV-B3 PER CAPITA CONSUMPTION OF GROUNDNUTS AND GROUNDNUT OILBY MAIN COUNTRIES, 1975/77 ................................ IV - 11

IV-B4 CONSTRAINED DEMAND MATRIX OF OILS ELASTICITIES AND CROSS-ELASTICITIES: E.E.C. (9) ................................. IV - 13

IV-Cl GROUNDNUT OIL--EXPORTS BY MAIN COUNTRIES AND ECONOMICREGIONS ........................................... IV - 15

IV-C2 GROUNDNUT OIL--IMPORTS BY MAIN COUNTRIES AND ECONOMICREGIONS ........................................... IV - 16

IV-C3 GROUNDNUT MEAL--EXPORTS BY MAIN COUNTRIES AND ECONOMICREGIONS ........................................... IV - 17

IV-C4 GROUNDNUT MEAL--IMPORTS BY MAIN COUNTRIES AND ECONOMICREGIONS ........................................... IV - 19

V-Al NIGERIA--GROUNDNUT PRICES ................................... V - 2

V-B1 PRICES OF GROUNDNUT PRODUCTS .V - 5

January 1984 (iii)

V-B2 REGRESSION RESULTS BETWEEN EXPORT UNIT VALUES OF GROUNDNUTPRICES IN SELECTED COUNTRIES AND INTERNATIONAL MARKETPRICES OF GROUNDNUTS, 1961-81 ............................... V - 6

V-B3 REGRESSION RESULTS BETWEEN EXPORT UNIT VALUES OF GROUNDNUTOIL PRICES IN SELECTED COUNTRIES AND INTERNATIONAL MARKETPRICES OF GROUNDNUT OIL, 1961-81 ............................ V - 7

V-B4 REGRESSION RESULTS BETWEEN EXPORT UNIT VALUES OF GROUNDNUTMEAL PRICES IN SELECTED COUNTRIES AND INTERNATIONAL MARKETPRICES OF GROUNDNUT MEAL, 1961-81 ........................... V - 8

VI-Al EEC-9 - SUMMARY OF IMPORT DUTIES APPLICABLE IN 1982 UNDERTHE COMMON CUSTOMS TARIFF (CCT), THE GENERALIZED SYSTEM OFPREFERENCES (CSP) SCHEME AND THE SCHEME FOR AFRICAN,CARIBBEAN AND PACIFIC (ACP) COUNTRIES ..................... VI - 2

January l9R4

1. INTRODUCTION

The groundnut, Arachis hypogaea L., is an annual legume native to

South America, likely originating in Bolivia. It was apparently taken to

Africa by early explorers and missionaries. In the United States, groundnuts

were not extensively used until after the civil war and, then, for many years

the crop was confined to Virginia and North Carolina.

Groundnuts have been described as nature's masterpiece of food

values. The pleasant aroma, nutty flavor, and smooth crisp texture of roasted

groundnuts are enjoyed by practically every one. They are also rich in

energy. It has been estimated that one lb. of groundnuts provides

approximately the energy value of 2 lb. of beef, 1.5 lb. of cheddar cheese, 9

pints of milk, or 36 medium size eggs.

Groundnuts have traditionally been an important food crop in

developing countries, and contribute significantly to the food supply of

industrial countries. The in-shell seed contains approximately 30% oil and

40% cake/meal. In recent times, large quantities of groundnuts have entered

world trade for oil extraction and direct edible use, making it one of the

world's major oilseed and edible nut crops.

January 1984 II-1

II. THE CHARACTERISTICS OF THE PRODUCT

A desirable groundnut is one that is well matured, uniform in size,

with a minimum of shrivelled kernels. The kernel consists of two cotyledons

(halves) and the germ (heart) is enveloped in a thin red-brown, purple or

white skin called the testa. The kernels are composed of approximately equal

weights of fatty and nonfatty constituents, Table A-1, the relative amounts of

each depending on variety and quality of the groundnuts. Most of the fatty

constituents are retained in the cotyledons, some are found in the germs or

hearts, and small amounts are generally found in the testa or skins.

Table II-Al COMPOSITION OF GROUNDNUT KERNELS

Constituent Range Average

------------- ( x-)

Moisture 3.9-13.2 5.0Protein 21.0-36.4 28.5Lipids 35.8-54.2 47.5Crude fiber 1.2-4.3 2.8Nitrogen-free extract 6.0-24.9 13.3Ash 1.8-3.1 2.9Reducing sugars 0.1-0.3 0.2Disaccharide sugar 1.9-5.2 4.5Starch 1.0-5.3 4.0Pentasans 2.2-2.7 2.5

Source: J. Woodroof, Peanuts: Production, Processing, Products, (Westport,Connecticut: AVI Publishing Co., 1973.

A. Edible groundnuts

With the exception of the US, most major producing countries produce

groundnuts for crushing by their domestic oilseed milling industry or for

export as fair average quality (FAQ) grade nuts to industrial countries for

oil extraction. However, from the decorticated nuts a selection is made,

January 1984 II-2

usually by hand, and these hand-picked selected (HPS) kernels are sold

directly as edible, confectionery grade groundnuts. Selected and g.raded

edible groundnuts need careful handling and good storage conditions in order

to avoid deterioration due to insects, moisture, mould growth, and high

temperatures, which can give rise to off-flavors in both the raw and processed

kernels. Off-flavors are produced by enzyme and chemical action and once pre-

sent in the kernels are very difficult to remove, and usually result in the

kernels being down-graded and being suitable only for crushing purposes.

Ideally, edible grade groundnuts should be stored under refrigerated condit-

ions, but this is not a commercial proposition in most developing countries.

At a minimum the kernels should be stored in a permanent, water and rodent-

proof store.

Edible groundnuts are marketed in the shell and as shelled kernels.

Groundnuts sold in shell are mainly consumed as roasted nuts, whereas ground-

nut kernels are used for the production of salted, oil-roasted kernels, for

the manufacture of peanut butter, for use as a cake or biscuit ingredient, for

making sweets and confections, etc. In India, most of the groundnuts consumed

are roasted. In West Africa groundnuts may be roasted, boiled in stews and in

soups, as well as in the form of a cake roasted in oil. In the US, edible

groundnuts are utilized mainly for the production of peanut butter.

B. Groundnut oil

Groundnut oil is a non-drying oil 1/ containing 40-67 percent oleic

acid, and 13-35 percent linoleic acid, but only trace amounts of linolenic

acid; so although it is a very unsaturated oil, it remains comparatively

resistant to oxidative rancidity, Table II-Bl.

1/ The drying oils, such as linseed oil, owe their value as materials forprotective coatings to their ability to polymerize or "dry" after theyhave been applied, to form tough adherent, impervious, and abrasion-resistant films.

January 1984 II-3

Table II-B1: TYPICAL PERCENTAGES OF FATTY ACIDS BY TYPE

Saturated Unsaturated Polyunsaturated

Coconut 90 10Palm 48 42 10Cottonseed 25 45 30Groundnut 17 60 23Soybean 14 35 51Sunflower 8 35 57Safflower 11 30 59

Source: UNCTAD/GATT, "Market Development of Groundnut Products,"(Geneva: UNCTAD/GATT, 1974).

In terms of its fatty acid composition, which is the main element

governing the performance and use of all oils, groundnut oil is placed roughly

the middle of a scale ranging from the highly saturated (coconut, palm kernel)

to the highly polyunsaturated (safflowerseed). It is more saturated than soy-

bean oil, and considerably more so than sunflowerseed oil. In addition to

these basic characteristics, groundnut oil has a good level of tocopherols

(vitamin E - a natural anti-oxidant).

African groundnut oil differs from the South American product in

being higher in saturated fats: South American groundnut oil is best described

as being closer to a groundnut/sunflowerseed oil blend. It is said to be less

stable and is not as suitable for frying.

The crude oil is a golden yellow color and contains a smaller

proportion of phospholipids, pigments and other minor constituents, than do

oils such as crude soybean and cottonseed oil. In fact, cold pressed oil from

good quality blanched kernels has such a small proportion of such constituents

that it can be used as a high quality edible oil without refining. However,

if it is used as a salad oil, it has a greater tendency to cloud, when held at

low temperatures, than most other vegetable oils.

January 1984 II-4

Refined groundnut oil is mostly used by various food industries,

while poor quality and crude oil may be used for the manufacture of soaps and

detergents, Table II-B2. The cosmetics industry uses groundnut oil to form

the base of many face creams, shaving creams and hair lotions. The oil is

believed to have an energizing effect on the skin when applied by massaging,

and it is extensively used for massaging polio patients. As an edible

product, groundnut oil is excellent for deep frying and pan frying, with a

smoke point of 226.50C. It can be clarified and re-used many times for frying

foods of a different flavor. For this purpose groundnut oil is considered to

be superior to cottonseed, maize and soybean oils. Refined unbleached oil is

also used for making mayonnaise and salad dressing, while the bleached oil is

used for making margarine. The oil is also used in the manufacture of

shortenings, when it is hydrogenated and blended with other vegetable oils.

The main disadvantages from which groundnut oil suffers are market-

derived, rather than technical. They include:

(a) Relatively high price: while a small price premium can be

justified by the oil's versatility and performance, improved

pressing techniques for other oils have steadily reduced this

advantage.

(b) "Heaviness" or saturation: the one "technical" problem faced by

groundnut oil is that it is relatively "heavy" or saturated

compared with such oils as sunflowerseed. Concern by consumers

about the health-related effects of consuming saturated oils

may work to the advantage of "lighter" sunflowerseed oil.

C. Groundnut cakes/meals

Groundnut cakes/meals obtained after extraction of the oil are

valuable animal feed materials; those from decorticated kernels contain 45-50

percent protein and 6.5-8.0 percent crude fiber, depending upon the amount of

residual oil present. Cakes/meals from undecorticated kernels, however, are

of lower nutritive value and contain about 30 percent of crude protein and 23

Table II-B2: GROUNDNUT OIL--MAJOR END-USES, RELEVANT PROPERTIES AND COMPETING MATERIALS

End-uses Form in which Relevant Properties Competing Materialsused Natural Synthetic

Edible end-usesMargarine Bleached (slight- Appropriate melting ranges are obtainable Most other fats and oils

ly hydrogenated) by varying degree of hardening. (mostly hydrogenated)

Shortening Hydrogenated Same as for margarine Palm, corn, coconut, soya-bean and cottonseed oils,animal fats

Cooking oil Refined /a Stability, due to high content of mono- Soyabean, sunflowerseedunsaturated fatty acid (oleic): oil is and most other poly-suitable for frying at high temperatures unsaturated vegetable oils,without oxidative rancidity animal fats (for cooking)

Salad oil Refined or not High protein, low acid value (digesti- Soybean, sunflowerseed andbility) and characteristic taste (it has, olive oil (other domesti-however, a greater tendency to cloud at cally available vegetablelow temperature than most other vegetable oils or mixtures)oils)

Other Refined, un- Same as for salad oil Most vegetable oilsManufacture of bleachedmargarinesalad dressing

Inedible end-uses

Soap Fatty acids (poor quality oil only) Lauric oils (babassu, palm Fatty(arachidic) kernel, coconut), palm oil, acids

inedible tallow greases

Othercosmetics /b Fatty acids Softening agent Lauric oils (mainly coconut) Fattypharmaceutical /c Crude acidslamp oil Crudelubricants Refined Adhesive Blown, refined rapeseed -

/a To obtain a polyunsaturated oil-mixture, without losing groundnut oil's basic characteristics of stability and lowacid value, it is often blended with other polyunsaturated vegetable oils, such as sunflowerseed oil.

/b Mainly used as a base for face creams, shaving creams and hair lotions.

/c Mainly used as a liniment and as a carrier for adrenaline.

Sources: After Nusbaumer and Franco, "Substitution between Vegetable Oils and the Trade of Developing Countries,"Tropical Science 1978, 20(1).

January 1984 II-6

percent of crude fiber. Groundnut protein is deficient in both lysine and

methionine/cystine in relation to the nutritive requirements of man and the

monogastric animals. However, it is a good and palatable supplementary

protein concentrate for dairy and beef cattle. It is also a good supplement

for mature hogs but it produces soft pork. It is not as suitable for chicks

and young pigs since groundnut meal is deficient in methionine, cystine,

lysine and trypthophan.

The major constraint on the use of groundnut cakes and meals as feed

is the threat of contamination with aflatoxins. These are carcinogenic

metabolites of several widely-distributed toxin-producing strains of fungi,

especially those of the Aspergillus flavus group. The aflatoxins have been

found in many tropical and subtropical agricultural commodities but are

particularly associated with groundnuts and, to a lesser extent, other

oilseeds, such as cottonseeds and coconuts.

Aflatoxin is not destroyed during conventional oil milling or solvent

extraction processes and nearly all the aflatoxin present in the kernels

remains in the residual cake or extracted meal. Most groundnut cakes/meals

are apparently contaminated to some extent with aflatoxin, the level of

contamination depending upon their origin.

In controlling levels of aflatoxin contamination of livestock rations

two factors must be considered: (i) the effect aflatoxin may have on the

livestock, and (ii) the possibility of contamination of the final products

such as meat, milk and eggs, and the danger posed to consumers of these

products. Available evidence indicates that the effect of aflatoxin is

greater on smaller livestock, such as ducks and turkeys, and on young rather

than mature livestock. As most groundnut cakes/meals are likely to contain

more than 0.1 ppm of aflatoxin, they have mainly been used as an ingredient in

cattle feed.

Most industrial countries have imposed limits on the level of

aflatoxin permitted in animal feed and many, through fear of contamination,

have limited the proportion of groundnut cake/meal that can be incorporated

into certain animal feeds regardless of whether aflatoxin has been detected.

January 1984 II-7

SELECTED REFERENCES

Cuimmins, D.G. and Jackson, C.R., "World Peanut Production, Utilization andResearch," University of Foreign Special Publication No. 16,April 1982

ICRISAT, "Proceedings of the International Workshop on Groundnuts,"(Patancheru: ICRISAT, 1980)

Nusbaumer, J. and Frances, R., "Substitution between Vegetable Oils and theTrade of Developing Countries," Tropical Science 1978, 20 (1).

Tropical Products Institute, "The Oilseed Crops," Vol. 2 (London: TropicalProducts Institute, 1975)

UNCTAD/GATT, "Market Development of Groundnut Products," (Geneva: UNCTAD/GATT,1974)

Woodroof, J.G., Peanuts: Production, Processing, Products (Westport,Connecticut: AVI Pubishing Co., 1973)

January 1984 III-1

III. GROUNDNUT GROWING AND PROCESSING

A. Groundnut varieties

While there are several types of wild and cultivated groundnuts (also

known as peanuts, earth-nuts, monkey nuts, goobers, pindas, pinders, Manilla

nuts) they are usually considered to belong to a single variable species,

Arachis hypogaea L., in which distinctive cultivars are recognized. These may

be divided into two main types depending upon the stem habit: (i) alternate

branched forms, which occur in the true runners and the spreading bunch erect

forms, of the Virginia types; (ii) the sequential branched forms which occur

in the erect bunch forms of the Spanish-Valencia types. The groundnut is

unique in that after flowering, fertilization, and fruit set, the flower stalk

or gnophore (commonly known as a "peg") grows downwards and forces its way

into the soil, where the seedpod develops. Bunch-type cultivars mature in

three to four months and have small- or medium-sized pods containing one or

two small rounded seeds within a thin shell. The kernels average from 65-75

percent of the whole nuts. Runner-type cultivars usually maturing in four to

six months bear medium sized pods containing two to four oval seeds within a

comparatively thicker shell along the length of the branches. The kernels

average 60-75 percent of the whole nuts. The pods are between 1.3 to 7.6 cm

in length and roughly cylindrical. The shell of the pod comprises from 20 to

30 percent of the whole "nut" and may easily be separated from the kernels.

B. Climate and soil

The groundnut is grown under a wide range of environmental

conditions: in most tropical, sub-tropical and warmer parts of temperate

countries between 400 north and south of the equator. It requires abundant

sunshine and warmth and a minimum of 165 frost-free days during the growing

season. Most of the crop is produced in regions with an average annual rain-

fall of 1,200 mm and, when rain-fed, it thrives best when at least 550 mm are

evenly distributed during the growing season.

January 1984 III-2

Groundnuts do well on a variety of soils but best on well-drained,

friable, sands or sandy-loams with a pH of 6.0 to 6.4, provided there is

enough lime and other elements present for normal development. Those grown on

red clay or soils very high in organic matter may be stained; on heavy soils,

particles of dirt stick to the nuts making removal at harvest more difficult

without excessive loss of pods, as well as lowering the grade.

A light-textured soil that will not harden or bake is desirable

because (i) the plants can be harvested without injury or loss of numbers,

(ii) pegs bearing the fertilized ovules are able to penetrate the surface and

develop normally, (iii) the nuts may be harvested without loss of pods caused

by hardening of the soil, and (iv) the pods are well formed.

In addition to having a light texture, the soil should be free from

stones, gravel, iron concretions, pieces of glass, and other material that

cannot be easily screened or blown out of the harvested crop.

C. Cultural Practices

Groundnuts are grown under highly contrasting systems of agriculture,

ranging from large sophisticated, mechanized production units, as in the US,

to subsistence farming, using primitive tools, as in parts of Africa. Since

the pre-harvest aspects of groundnut growing are well-documented 1/ and tend

to be related to soil, climate and socio-economic conditions, this section

will be mainly concerned with pests and diseases, and the post-harvest

aspects.

1/ See, e.g., J.G. Woodruff, Peanuts: Production, Processing, Products,(Westport, Connecticut: AVI Publishing Co., 1973).

January 1984 III-3

D. Pests and Diseases

The groundnut plant is susceptible to attacks by numerous pests and

diseases, particularly in developing countries where control practices are

inadequate or non-existent. Among the most serious diseases are leaf spots,

southern blight (collar rot, peg rot), bacterial wilt, and rosette virus. The

ubiquitous fungus, Aspergillus flavus, is a serious threat to the industry

because of its ability to colonize groundnuts and produce aflatoxin. 1/ The

USDA has developed productive genotypes which reduce fungal colonization by

about 50 percent. Cultivars with resistance to rosette virus, originally

developed in Nigeria, Upper Volta and Senegal, are now entering general

production in West Africa. The problem of combining these factors into

adapted cultivars with usable resistance at the farm level remains to be

solved.

Insects feeding on roots, pods and pegs also cause heavy losses.

Some insect pests damage groundnuts directly (e.g., termites, millipedes,

thrips and blister beetles) while others are of concern because they transmit

certain virus diseases.

E. Harvesting

The groundnut has a fruiting period covering about two months. All

the pods do not ripen simultaneously, so that timing of the harvest is

critical since it can greatly affect the yield and nut quality. If the ground-

nuts are harvested too early, many of the pods will be immature, with

shrivelled kernels; but if the harvesting is too much delayed many of the pods

will be lost, through sprouting in the case of Spanish type nuts, or through

1/ This highly toxic material was discovered in 1960 by the Tropical ProductsInstitute following the death in the UK of some 100,000 turkey poultswhich had been fed compound feed containing a consignment of groundnutmeal from Brazil. Research revealed that the agent responsible was acarcinogenic metabolite of the mould Aspergillus flavus. The mouldthrives under hot and humid conditions; it requires a temperature ofbetween 11-370C and a minumum substrate moisture content of about 12percent.

January 1984 III-4

being pulled off and left in the soil in the case of runner and Virginia bunch

types.

The actual method of harvesting employed depends upon the type of

groundnut grown. Bunch types may be harvested manually by pulling out the

entire plants in countries such as India or mechanically as in the US. In the

case of the spreading types, harvesting is a rather difficult operation as pod

formation takes place all along the creeping branches of the plant and the

pegs are comparatively thinner and more delicate. These types are frequently

harvested by digging or by harrowing in such a way that the plant anchorage is

severed. Unless combine harvesters are used with artificial drying of the

nuts, the harvested plants undergo a short drying or curing period in the

field and the pods are then removed by picking or threshing with a combine.

F. Drying

It is essential to harvest groundnuts under dry conditions and to

reduce their moisture content from about 30 to 8 percent as quickly as

possible, in order to prevent their quality deteriorating through fungal

attack, particularly through the development of aflatoxin contamination from

the fungus Aspergillus flavus. Drying is in fact one of the most important

operations in ensuring the quality of groundnuts and requires careful

control. Excessive heat, i.e., temperature above 350C can result in the

development of off-flavors, skin slippage, and splitting of the cotyledons on

mechanical shelling, which makes the nuts unsuitable for sale as hand-picked,

selected (HPS) kernels for the confectionery trade.

G. Processing

Groundnuts are sold to the confectionery trade either in shell or

after shelling. Although unshelled nuts can be used for oil extraction, oil

yields are reduced and the resulting cake has a high proportion of fiber which

limits its use as an animal feed. The nuts are, therefore, usually shelled

before oil extraction. With large-scale production, the nuts are decorticated

by mechanically driven machines which may be situated at the mill. For the

January 1984 III-5

production of oil, the kernels are usually broken in rollers and conditioned

by cooking and adjusting the moisture content. In the case of groundnuts used

for the production of protein flour, the testa, which contains an anti-

nutritional factor, goitrogen, is removed. This can be achieved by a process

which is also used for blanching edible groundnuts. It involves roasting the

kernels to loosen the skins, passing them through a size-grading machine, and

finally removing the skins, by a combination of scouring and aspiration in the

blanching equipment.

January 1984 III-6

SELECTED REFERENCES

Tropical Products Institute, "The Oilseeds," Vol. 2 (London: Tropical ProductsInstitute, 1975)

Woodroof, J.G., Peanuts: Production, Processing, Products (Westport,Connecticut: AVI Publishing Co., 1973)

January 1984 IV-1

IV. THE WORLD GROUNDNUT INDUSTRY

A. Production

After a period of relatively steady expansion over much of the 1960s,

world harvested area and production of groundnuts have been relatively stable,

Table IV-A1. However, there have been very marked year-to-year fluctuation in

output in many producing countries, reflecting primarily changes in weather

conditions, as groundnuts are grown mainly as a rainfed crop in areas of the

world which have a very irregular rainfall.

Groundnuts are grown in over a hundred countries but about 20 account

for most of total output. Tables IV-A2 and IV-A3 give the world production of

groundnuts in oil equivalent and meal equivalent terms, respectively. In

recent years three countries, India, China and the United States, have

accounted for nearly 60% of world production. The proportion rises to over

75% with the addition of Senegal, Sudan, Nigeria, Argentina and Brazil.

In India, by far the world's largest producer, annual output is

highly dependent on the total amount of rainfall as well as on its

distribution over the season of the monsoon rains. There were marked crop

fluctuations in the first part of the decade, with a low of 4.1 million tons

in 1972 and a peak of 6.8 million tons in 1975. In most recent years,

production has been more steady, averaging around 6 million tons a year

(except 1980, when it fell to 5 million). Nevertheless, output has not

expanded much. The amount of groundnuts grown under irrigation has begun to

show some increases in recent years and production support prices have been

instituted. Although the support prices have been gradually increased, their

impact on groundnut output has not yet been very significant as the prices

offered have generally remained below market prices at harvest time and there

is no effective procurement system under which farmers are guaranteed an

outlet at the fixed support price. Nevertheless, a major effort is being

directed under India's Sixth Five-Year Plan (1980-85) to increase groundnut

production from 6.1 million tons to 7.3 million tons by 1984/85.

Table IV-Al: GROUNDNUT AREA, PRODUCTION AND YIELD IN SELECTED COUNTRIES

Harvested Area Production Yield1969-71 1979 1980 1981 1969-71 1979 1980 1981 1969-71 1979 1980 1981 P

---------- (000 ha) --------- -------- (000 tons)------- ----------- (kg/ha)----------

DevelopingAsia

China 1,791 2,128 2,453 2,454 2,134 2,908 3,686 3,513 1,191 1,366 1,503 1,431India 7,287 7,238 6,905 7,500 5,807 5,768 5,020 6,000 797 797 727 800

Indonesia 376 473 507 521 462 709 793 855 1,230 1,497 1,564 1,641

AfricaCameroon 244 358 350 350 206 108 110 120 845 303 314 343Malawi 233 250 250 250 182 175 177 180 781 700 708 720Mali 257 200 200 207 144 179 130 190 561 893 650 917

Nigeria 1,846 600 600 600 1,660 540 570 580 900 900 950 967

Senegal 1,006 1,069 1,057 1,000 794 676 489 900 789 632 463 900

S. Africa 370 213 280 280 364 200 375 374 984 939 1,342 1,335

Sudan 490 980 960 950 370 880 810 800 756 898 844 842Uganda 263 260 230 233 207 227 220 150 786 873 957 643

S. AmericaArgentina 255 393 279 200 280 671 293 239 1,099 1,710 1,048 1,195Brazil 670 289 311 242 876 462 483 355 1,307 1,599 1,554 1,464

IndustrialUSA 591 615 566 602 1,289 1,800 1,047 1,791 2,182 2,927 1,849 2,974

Source: FAO, Production Yearbook, 1981, (FAO: Rome, 1982).

Table IV-A2: GROUNDNUT (OIL EQUIVALENT)--PRODUCTION BY MAIN COUNTRIES AND ECONOMIC REGIONS

Actual Share of World Total Growth Rate _Countries/Economies 1961 1965 1970 1975 1980 1981 1961 1965 1970 1975 1980 1981 1961-81 3

------ (000 tons) ------------ (----------------- (%) …-…- - p.a.)-

Industrial 280 374 460 558 346 572 6.4 7.8 8.5 9.9 6.7 9.8 3.2N. America 226 325 406 523 314 537 5.2 6.8 7.5 9.3 6.1 9.2 4.0

United States 226 325 406 523 314 537 5.2 6.8 7.5 9.3 6.1 9.2 4.0

Centrally Planned 28 36 34 31 42 38 0.6 0.7 0.6 0.6 0.8 0.7 1.1

Developing 4,079 4,401 4,919 5,040 4,751 5,201 93.0 91.5 90.9 89.5 92.4 89.5 0.6Asia 3,328 2,279 2,896 3,088 3,050 3,352 53.1 47.4 53.5 54.9 59.4 57.7 1.5

Burma 114 86 159 123 101 143 2.6 1.8 2.9 2.2 2.0 2.5 1.0China 541 728 682 642 1,106 1,054 12.3 15.1 12.6 11.4 21.5 18.1 2.2India 1,498 1,279 1,833 2,026 1,506 1,800 34.1 26.6 33.9 36.0 29.3 31.0 0.9Indonesia 126 122 141 190 238 257 2.9 2.5 2.6 3.4 4.6 4.4 3.7Thailand 32 39 37 43 39 34 0.7 0.8 0.7 0.8 0.8 0.6 0.1

Africa 1,429 1,698 1,589 1,621 1,367 1,560 32.6 35.3 29.4 28.8 26.6 26.9 -0.5Cameroon 25 42 60 74 33 36 0.6 0.9 1.1 1.3 0.6 0.6 1.7Malawi 38 47 45 50 53 54 0.9 1.0 0.8 0.9 1.0 0.9 0.8Mali 33 46 47 62 39 57 0.8 1.0 0.9 1.1 0.8 1.0 2.3Nigeria 470 593 474 84 171 174 10.7 12.3 8.8 1.5 3.3 3.0 -9.1Senegal 299 336 177 433 147 270 6.8 7.0 3.9 7.7 2.9 4.6 -1.3South Africa 79 59 98 81 113 112 1.8 1.2 1.8 1.4 2.2 1.9 1.3Sudan 80 91 102 239 243 240 1.8 1.9 1.9 4.2 4.7 4.1 6.9Uganda 36 41 63 58 66 45 0.8 0.9 1.2 1.0 1.3 0.8 2.7Zaire 44 41 80 92 94 96 1.0 0.9 1.5 1.6 1.8 1.7 5.3

L. America 308 407 414 310 311 262 7.0 8.5 7.6 5.5 6.1 4.5 -0.7Argentina 80 132 70 113 88 72 1.8 2.7 1.3 2.0 1.7 1.2 0.6Brazil 175 223 278 133 145 106 4.0 4.6 5.1 2.4 2.8 1.8 -3.1

WORLD 4,388 4,810 5,413 5,629 5,139 5,810 100.0 100.0 100.0 100.0 100.0 100.0 0.9

Source: FAO, Production Yearbook Tapes.

Table IV-A3: GROUNDNUT (MEAL EQUIVALENT)--PRODUCTION BY MAIN COUNTRIES AND ECONOMIC REGIONS 4

Actual Share of World Total Growth Rate F

Countries/Economies 1961 1965 1970 1975 1980 1981 1961 1965 1970 1975 1980 1981 1961-81 m

--------------('000 tons)…------------- -----------------…(%)…----------------- -(% p.a.)-

Industrial 374 498 613 744 462 762 6.4 7.8 8.5 9.9 6.7 9.8 3.2N. America 301 434 541 698 419 716 5.1 6.8 7.5 9.3 6.1 9.2 4.0United States 301 434 541 698 419 716 5.1 6.8 7.5 9.3 6.1 9.2 4.0

Centrally Planned 37 48 45 42 56 50 0.6 0.7 0.6 0.6 0.8 0.6 1.1

Developing 5,439 5,867 6,559 6,720 6,334 6,934 93.0 91.5 90.9 89.5 92.4 89.5 0.6Asia 3,105 3,039 3,862 4,118 4,067 4,470 53.1 47.4 53.5 54.9 59.4 57.7 1.5

Burma 152 115 212 164 135 190 2.6 1.8 2.9 2.2 2.0 2.5 1.0China 722 970 909 857 1,474 1,405 12.3 15.1 12.6 11.4 21.5 18.1 2.2India 1,998 1,705 2,444 2,702 2,008 2,400 34.2 26.6 33.9 36.0 29.3 31.0 0.9Indonesia 168 162 188 254 317 344 2.9 2.5 2.6 3.4 4.6 4.4 3.7Thailand 43 52 50 57 52 45 0.7 0.8 0.7 0.8 0.8 0.6 0.1

Africa 1,906 2,264 2,119 2,161 1,823 2,080 32.6 35.3 29.4 28.8 26.6 26.8 -0.5Cameroon 33 57 80 98 44 48 0.6 0.9 1.1 1.3 0.6 0.6 1.7Malawi 51 63 61 66 71 72 0.9 1.0 0.8 0.9 1.0 0.9 0.8Mali 44 61 63 82 52 76 0.8 1.0 0.9 1.1 0.8 1.0 2.3Nigeria 626 791 632 112 228 232 10.7 12.3 1.5 1.5 3.3 3.0 -9.1Senegal 398 448 236 578 196 360 6.8 7.0 7.7 7.7 2.9 4.6 -1.3South Africa 105 79 130 108 150 150 1.8 1.2 1.4 1.4 2.2 1.9 1.3Sudan 106 122 136 318 324 320 1.8 1.9 4.2 4.2 4.7 4.1 6.9Uganda 48 54 84 78 88 60 0.8 0.8 1.0 1.0 1.2 0.8 2.7Zaire 59 55 107 123 125 128 1.0 0.9 1.6 1.6 1.8 1.7 5.3

L. America 411 543 551 414 415 350 7.0 8.5 5.5 5.5 6.1 4.5 -0.7Argentina 106 176 94 150 117 95 1.8 2.7 2.0 2.0 1.7 1.2 0.6Brazil 234 297 371 177 193 142 4.0 4.6 2.4 2.4 2.8 1.8 -3.1

WORLD 5,850 6,413 7,217 7,505 6,852 7,747 100.0 100.0 100.0 100.0 100.0 100.0 0.9

Source: FAO, Production Yearbook Tapes.

January 1984 IV-5

Output in China has varied between 2.5 and 3.0 million tons in most

years during the seventies except for a distinct setback in 1976 and 1977. It

is estimated to have risen to around 3.6 million tons in 1980 and 1981,

reportedly reflecting a situation when relative price incentives favored

oilseed production. China's groundnut output is likely to grow more slowly in

future as there are reports that greater emphasis is now to be given to

increasing grain production.

In the United States, except for a sharp setback in 1980 when drought

conditions reduced yields drastically and the area harvested fell below the

level of the preceding year, production continued to increase steadily despite

government area limitations. *Since 1977. groundnut production in the United

States has been regulated through area allotments and marketing quotas, with

the price of groundnuts grown within the quota supported at a much higher

level than non-quota groundnuts. 1/ The Agriculture and Food Act of 1981

continues the two-price program that prevailed from 1978-81. It retains

poundage quotas but drops acreage allotments. Any farmer in the United States

can now grow and market groundnuts for export, whether they have a poundage

quota or not. The national poundage quota will be reduced from 1.44 million

short tons in 1981 to 1.2 million in 1982. It will be further reduced to

1.1673 million in 1983, 1.1347 million in 1984, and to 1.1 million in 1985.

Price supports will be offered on quota groundnuts in the same manner

as in the past. The price support for quota groundnuts within the farm

poundage quota was set at not less than $550 a short ton in 1982--up from $455

in 1981 and the $420 a short ton minimum prescribed in the 1977 Act.

All groundauts grown in excess of quota are referred to as

"additional" groundnuts. Under the new program, these groundnuts may be grown

on any farm, whether or not it has a poundage quota. Additional groundnuts

are physically identical to quota groundnuts, but there is a significant

difference in the application of the program.

1/ V.N. Grise, "The Peanut Program for 1982-85" Fats and Oils Outlook andSituation, Economic Research Service, USDA, February 1982.

January 1984 IV-6

The support price for additional groundnuts was 8250 a short ton in

1981. The support price for additional groundnuts in 1982 was $200 a ton. It

was further reduced to $185 on February 15, 1983.

The most significant change in groundnut production since 1965 has

been the decline in output of West Africa, a region which has traditionally

accounted for the bulk of world exports of groundnuts and oil. The overall

decline in production, which was accompanied by sharp year-to-year

fluctuations, led to a reduction in the continent's contribution to world

output from 30% in 1969-71 to 26% in 1979-80. In key producing countries in

West Africa, output was curtailed by repeated droughts and diseases as well as

by a number of other factors, including price policies which did not allow

farmers to obtain the full advantage of world prices. The sharpest decline

was registered in Nigeria which, in the early seventies, was the leading

African producer but now ranks only third. The Nigerian government has

recently embarked on a five-year plan to rehabilitate the groundnut

industry. Senegal, whose production displays sharp year-to-year fluctuations

closely linked to weather conditions has been the leading African producer in

most years since 1973. Output does not, however, show any distinct trend.

The government's policy is reported to be to expand production of edible-grade

groundnuts while aiming at total groundnut production at about 1.2 million

tons. Sudan which occasionally outranked Senegal as Africa's leading producer

in recent years increased its area under groundnuts by over two-thirds during

the seventies. The irrigated share of total groundnut production in Sudan is

reported to have reached as high as 40% in recent years. Sudan has plans to

increase groundnut production in the irrigated areas and to increase groundnut

exports.

In Latin America, Brazilian output fell by half between the early and

the late seventies, reflecting a sharp reduction in area, although yields rose

significantly. Groundnuts are mainly grown by smallhoders who appear to have

benefited from the government support schemes to a lesser extent than large

farmers such as soybean farmers. Production has tended to increase in

Argentina during the seventies, despite occasionally marked year-to-year

variations.

January 1984 IV-7

Yield: A good average yield under suitable conditions is considered to be

1,000-1,350 kg/ha (900-1,200 lb/acre) unshelled nuts. Yields are highly

variable, ranging from some 800 kg/ha in India to about 3,000 kg/ha in the

United States. Yields under irrigated conditions are often twice that

obtained when grown as a dry crop.

Supply response: Few studies on the output response of groundnuts and other

annual oilseeds to price changes are available. The most comprehensive

information on supply (area- and yield-price) elasticities of oilseeds

(including groundnuts) are to be found in Rojko et. al. (1978).

Unfortunately, the supply elasticities are for oilseeds as a group; no

estimates were made of supply elasticities for individual oilseeds. It is

assumed here that the supply elasticities for groundnuts approximate the

oilseed supply elasticities. The elasticities used in the USDA Grains-

Oilseeds and Livestocks (GOL) model are shown in Table IV-A4. The supply

elasticities in the GOL model for both industrial and developing countries

reflect the full effect of a price change on production adjustment over a

number of successive years. As such they can be considered to be long-term

elasticities.

Caution should be exercised in interpreting both the area and yield

elasticities. Lower elasticities are associated with resource-tight

industrial countries (e.g. Japan) and for developing countries with large

subsistence sectors. The lowest direct area elasticities are to be found in

land-short, largely subsistence countries such as India. The highest yield-

price elasticities are associated with the technologically advanced, heavily

commercialized industrial countries using large amounts of high productivity

inputs and making heavy capital investments in agricultural infrastructure.

The lowest elasticities are found in the largely subsistence, low technology

developing countries.

January 1984 IV-8

Table IV-A4: OILSEEDS--ELASTICITIES OF SUPPLY

Country Area-Price Elasticity Yield-Price Elasticity

Us 3.25 0.02Canada 1.00 0.20Japan 0.28 0.15Australia and New Zealand 0.30 0.15Argentina 0.45 0.10Brazil 1.60 0.05India 0.20 0.15Indonesia 0.30 0.02

Source: Rojko, et. al., "Alternative Futures for World Food in 1985,"USDA, Foreign Agricultural Economic Report No. 146, 1978.

B. Consumption

Groundnuts, because of their relatively high oil and protein content

have traditionally been an important food crop in most producing countries.

Of the major producers, India, China and, to a lesser extent, the United

States, utilize the major proportion of their production domestically, whereas

Sudan and Senegal grow groundnuts principally for export, Tables IV-BI and IV-

B2. In most producing countries large quantities of the nuts are eaten raw or

after being roasted in the shell. Per capita consumption of groundnuts is

highest in Sudan and Senegal, Table IV-B2. Sometimes the nuts-are pressed by

hand to produce oil and a crude form of flour, which is used in soups and

stews. Peanut butter, a paste produced from whole nuts, is of considerable

importance in the United States and accounts for the high per capita domestic

consumption of groundnuts in that country, Table IV-B3. In addition,

considerable quantities of edible grade groundnuts enter world trade for

consumption, after roasting and salting, as cocktail nuts and for

confectionery purposes, in the manufacture of candy, biscuits and various

chocolate products. Per capita consumption of groundnut oil in the producing

countries is highest in Senegal and Sudan.

Table IV-Bl: GROUNDNUT (OIL EQUIVALENT)--APPARENT CONSUMPTION BY MAIN COUNTRIESAND ECONOMIC REGIONS

Actual Share of World Total Growth RateCountries/Economies 1961 1965 1970 1975 1980 1981 1961 1965 1970 1975 1980 1981 1961-81 X

--------------('000 tons)------------ ----------------()------------------- -(X p.a.)-

Industrial 874 1,006 1,090 954 774 960 20.0 21.0 20.0 16.9 15.0 16.5 -0.5N. America 334 290 400 446 209 547 5.3 6.0 7.3 7.9 4.0 9.4 2.3

United States 216 266 371 415 182 515 4.9 5.5 6.8 7.3 3.5 8.8 2.3Canada 18 24 28 31 27 32 0.4 0.5 0.5 0.5 0.5 5.5 1.5

EC-10 525 605 554 415 480 334 12.0 12.6 10.2 7.3 9.3 5.7 -2.2France 306 344 248 216 279 183 7.0 7.2 4.6 3.8 5.4 3.1 -2.0Germany, F.R. 47 67 81 49 53 44 1.1 1.4 1.5 0.9 1.0 0.8 -1.4Italy 33 44 56 51 50 24 0.8 0.9 1.0 0.9 1.0 0.4 -0.3Netherlands 15 17 20 23 29 27 0.3 0.4 0.4 0.4 0.6 0.5 2.5United Kingdom 97 103 118 56 45 41 2.2 2.1 2.2 1.0 0.9 0.7 -6.0

Japan 44 50 61 42 41 43 1.0 1.0 1.1 0.7 0.8 0.7 -0.7

Centrally Planned 75 67 54 54 58 55 1.7 1.4 1.0 1.0 1.1 0.9 -1.9

Developing 3,421 3,725 4,300 4,649 4,331 4,812 78.3 77.6 79.0 82.2 83.9 82.6 1.3Asia 2,330 2,279 2,882 3,054 3,050 3,221 53.3 47.5 52.9 54.0 59.1 55.3 1.5

Burma 116 88 159 123 101 143 2.7 1.8 2.9 2.2 2.0 2.5 0.3China 536 703 668 618 1,063 906 12.3 14.7 12.3 10.9 20.6 15.5 2.0India 1,485 1,280 1,823 2,000 1,499. 1,777 34.0 26.7 33.5 35.4 29.0 30.5 1.0Indonesia 121 119 130 184 239 259 2.8 2.5 2.4 3.3 4.6 4.4 3.8Thailand 27 34 34 40 38 29 0.6 0.7 0.6 0.7 0.7 0.5 0.4

Africa 775 982 1,024 1,217 1,176 1,405 17.7 20.5 18.8 21.5 22.8 24.1 2.2Cameroon 21 38 55 67 33 36 0.5 0.8 1.0 1.2 0.6 0.6 2.5Malawi 36 40 36 39 43 47 0.8 0.8 0.7 0.7 0.8 0.8 1.2Mali 7 37 36 57 34 47 0.2 0.8 0.7 1.0 0.7 0.8 5.0Nigeria 223 293 268 84 178 178 5.1 6.1 4.9 1.5 3.4 3.1 -3.5Senegal 65 107 9 233 72 248 1.5 2.2 0.2 4.1 1.4 4.3 4.2S. Africa 34 45 56 40 77 56 0.8 0.9 1.0 0.7 1.5 1.0 2.2Sudan 46 29 76 150 194 187 1.1 0.6 1.4 2.7 3.8 3.2 9.4Uganda 33' 40 63 58 66 45 0.8 0.8 1.2 1.0 1.3 7.7 3.0Zaire 40 38 80 93 94 96 0.9 0.8 1.5 1.6 1.8 1.6 5.5

L. America 279 362 333 308 70 153 6.4 7.5 6.1 5.4 1.4 2.6 -3.9Argentina 49 70 28 111 -25 15 1.1 1.5 0.5 2.0 - 0.3 -5.0Brazil 174 215 225 74 12 51 4.0 4.5 4.1 1.3 0.2 0.9 -10.3

WORLD 4,370 4,798 5,444 5,657 5,162 5,827 100.0 100.0 100.0 100.0 100.0 100.0 0.9

Source: FAO, Production Yearbook Tapes.

Table IV-B2: GROUNDNUT (MEAL FEQUIVALENT)--APPARENT CONSUMPTION BY MAIN COUNTRIES AND ECONOMIC REGIONS

'-1

Actual Share of World Total Growth Rate <

Countries/Economies 1961 1965 1970 1975 1980 1981 1961 1965 1970 1975 1980 1981 1961-81co

…__---- ('000 tons) (Z)--------- -(% p.a.)-

Industrial 1,956 2,107 2,099 1,594 1,300 1,276 33.4 32.5 28.4 21.2 18.6 16.3 -1.9N. America 311 416 540 590 261 694 5.3 6.4 7.8 7.8 3.7 8.9 2.1United States 290 387 511 554 228 651 5.0 6.0 7.4 7.4 3.3 8.3 2.0Canada 21 29 29 36 33 42 0.4 0.4 0.5 0.5 0.5 0.5 2.6

EC-10 1,428 1,407 1,141 852 942 484 24.4 21.7 11.3 11.3 13.5 6.2 -3.3France 342 476 415 359 444 113 5.8 7.4 5.6 4.8 6.4 1.4 -1.2Germany, F.R. 127 136 155 112 178 188 2.2 2.1 2.1 1.5 2.6 2.4 -0.7Italy 54 58 58 45 41 43 0.9 0.9 0.8 0.6 0.6 0.6 -0.9Netherlands 61 32 31 38 56 47 1.0 0.5 0.4 0.5 0.8 0.6 -0.6United Kingdom 702 541 409 252 119 52 12.0 8.4 5.5 3.3 1.7 0.7 -8.3

Japan 58 107 227 85 59 62 1.0 1.7 3.1 1.1 0.8 0.8 -1.0

Centrally Planned 304 598 732 534 332 362 5.2 9.2 9.9 7.1 4.8 4.6 -2.3E. Europe 190 456 575 413 172 180 3.2 7.0 7.8 5.5 2.5 2.3 -3.1

Developing 3,591 3,770 4,548 5,409 5,349 6,168 61.4 58.2 61.6 71.8 76.6 79.0 2.2Asia 2,531 2,205 3,030 3,504 3,626 4,010 43.3 34.1 41.1 46.5 51.9 51.4 2.2

Burma 12 48 172 147 130 188 0.2 0.7 2.3 2.0 1.9 2.4 9.7China 719 941 899 839 1,437 1,274 12.3 14.5 12.2 11.1 20.6 16.3 2.1India 1,558 970 1,667 2,081 1,539 2,023 26.6 15.0 22.6 27.6 22.0 25.9 1.2Indonesia 165 158 172 250 319 346 2.8 2.4 2.3 3.3 4.6 4.4 3.9Thailand 31 32 42 61 56 42 0.5 0.5 0.6 0.8 0.8 0.5 3.3

Africa 854 1,204 1,210 1,492 1,453 1,852 14.6 18.6 16.4 19.8 20.8 23.7 2.7Cameroon 27 50 72 87 44 48 0.5 0.8 1.0 1.2 0.6 0.6 2.6Malawi 46 51 46 50 53 62 0.8 0.8 0.6 0.7 0.8 0.8 1.3Mali 8 45 44 70 41 66 0.1 0.7 0.6 0.9 0.6 0.8 5.4Nigeria 249 365 296 105 242 239 4.3 5.6 4.0 1.4 3.5 3.1 -2.6Senegal 56 122 4 260 95 332 1.0 1.9 - 3.5 1.4 4.3 3.2South Africa 34 51 63 46 138 119 0.6 0.8 0.9 0.6 2.0 1.5 6.8Sudan 30 12 61 163 136 190 0.5 0.2 0.8 2.2 1.9 2.4 13.6Uganda 43 53 83 78 88 60 0.7 0.8 1.1 1.0 1.3 0.8 3.2Zaire 58 55 106 123 125 128 1.0 0.8 1.4 1.6 1.8 1.6 5.4

L. America 162 269 235 336 169 216 2.8 4.2 3.2 4.5 2.4 2.8 0.3Argentina -1 44 29 114 -11 25 - 0.7 0.4 1.5 - 0.3 5.9Brazil 118 164 138 110 76 81 2.0 2.5 1.9 1.5 1.1 1.0 -4.0

WORLD 5,851 6,475 7,379 7,536 6,980 7,806 100.0 100.0 100.0 100.0 100.0 100.0 0.8

Source: FAO, Production Yearbook Tapes.

January 1984 IV-11

Table IV-B3: PER CAPITA CONSUMPTION OF GROUNDNUTS AND GROUNDNUTOIL BY MAIN COUNTRIES, 1975/77

Groundnuts (shelled) Groundnut Oil

----------------(kg/ha)-------------

Canada 2.4 0.1United States 2.9 0.4France 0.2 5.0UK 1.3 0.4Germany 0.2 0.8Italy 0.2 1.0Netherlands 0.2 1.3Japan 0.9China (in shell) 1.2 0.4India (in shell) 0.5 1.9Indonesia 2.2 0.1Nigeria 2.1 0.5Senegal 6.8 7.7Sudan 9.2 6.2Argentina (in shell) 0.2 1.0Brazil 0.8Venezuela 7.0

Source: FAO, Food Balance Sheets and Per Caput Food Supplies,(FAO: Rome, 1980).

Among the major importing countries, France and Venezuela have the highest per

capita consumption of groundnut oil.

Demand response: The demand for groundnut oil, like most fats and oils, is a

derived demand based on the demand of consumers for the final product. Few

studies on the price elasticity of demand for groundnut oil appear to have

been undertaken. An early study by METRA (1968) 1/ indicated that the direct

price elasticity of demand for groundnut oil in the EC, the major groundnut

1/ METRA, "Analyse Econometrique du Marche des Oleaginexux Tropicaux,(Brussels: METRA International, 1968).

January 1984 IV-12

oil market, was about -0.76. A later study by Labys (1977) 1/ found a

slightly higher, -1.012, direct elasticity of demand for groundnut oil in the

EC, Table IV-B4. Labys- results also suggest some substitutability with soy-

bean oil, lauric oil and palm oil, implied by the positive price cross-

elasticity. A more recent study by Chow and Yusof (1981) 2/ of world export

demand for 13 fats and oils found a somewhat lower, -0.415, direct price

elasticity of world export demand for groundnut oil.

C. Trade

Trade in groundnuts and groundnut products represents a smaller share

of total production than for many other oilseeds and oils because of the

importance of domestic consumption in many producing countries. World exports

of groundnuts and oil (oil basis) has been estimated by the FAO to represent

21% of world production compared with 54% for palm oil, 45% for coconut oil

and 44% for soybean oil. The two leading producers, India and China, are only

small exporters, primarily of groundnuts for direct edible use and, in the

case of India, of groundnut meal, of which it is the largest exporter.

Groundnuts: Groundnuts are exported both in the shell and as

kernels. Groundnuts in the shell are intended primarily for direct human

consumption. There is also a sizeable trade in groundnut kernels for direct

consumption. Historically, trade in groundnuts has been well over one million

tons annually, but in recent years the decline in production of certain West

African producers has been associated with a tendency for the groundnut trade

to decline.

In similar fashion to exports, groundnut imports have declined since

1965. The EC is still the major outlet, taking about 70 percent of the total.

1/ W.C. Labys, "Multicommodity Substitution Patterns in the InternationalFats and Oils Market," European Review of Agricultural Economics 4(1).

2/ C.S. Chow and B. Yusof, "A Statistical Analysis of the World Export andPrice Relationships of the Major Oils and Fats with Special Reference toPalm Oil," (Kuala Lumpur: PORIM, 1981).

January 1984 IV-13

Table IV-B4: CONSTRAINED DEMAND MATRIX OF OILS ELASTICITIESAND CROSS-ELASTICITIES: E.E.C. (9)

Prices Soy- Ground- Lard Lauric Fish Palm Expendi- R2 DWbean nut Oil Oil Oil tures

Consumption Oil Oil

Soybean oil -1.655 -0.844 -1.002 -0.863 -0.148 -0.466 4.321 0.81 0.10(1.98) (0.88) (1.63) (1.71) (0.20) (0.68) (2.00)

Groundnut Oil 0.038 -1.012 0.098 0.156 -0.116 0.198 0.238 0.58 0.18(0.11) (2.61) (0.39) (0.77) (0.38) (0.81) (0.27)

Lard -0.179 0.091 -0.508 0.021 0.0111 0.258 0.391 0.62 0.26(0.75) (0.33) (2.91) (0.15) (0.52) (1.52) (0.64)

Lauric Oil 0.313 0.563 0.412 -0.033 0.281 0.229 -1.796 0.59 0.15(0.81) (1.28) (1.46) (0.14) (0.82) (0.83) (1.81)

Fish Oil -0.231 -1.285 -0.525 -0.769 -0.710 -0.690 4.734 0.38 0.48(0.25) (1.24) (0.79) (1.41) (0.88) (1.06) (2.02)

Palm Oil -0.176 0.025 -0.131 -0.423 -0.278 -0.831 2.017 0.58 1.50(0.48) (0.60) (0.49) (1.92) (0.85) (3.16) (2.13)

Source: W.C. Labys (1977).

The Federal Republic of Germany, France, Italy and the UK are the major

importers. The other major importers are Canada and Japan.

Most groundnut producing countries do not differentiate in their

foreign trade statistics between exports of edible and milling grades. How-

ever, although detailed information is not available, the FAO has estimated

that more than half of the groundnuts exported are probably consumed in

various direct and indirect food uses. Of the major importers of groundnuts

only France, Italy, Portugal and Switzerland use a larger proportion of their

imports for crushing. Imports by the other countries are mainly of edible

grade groundnuts.

January 1984 IV-14

Grountnut Oil: There have been important shifts between exporting regions in

trade in groundnut oil and in fact, the decreasing importance of Africa has

been even more striking in world groundnut oil exports than in production. In

1970 African groundnut oil exporters had over two-thirds of the market, with

Latin American suppliers providing over 17%, and the United States another

3.5%, Table IV-Cl. By 1981 Africa-s share had fallen to 28%, while that of

Latin America and the United States had risen to 24% and 6%, respectively.

In Africa, exports from Senegal have fluctuated sharply over the

period, reflecting annual crop variations, but the country has in most years

maintained its position as the leading exporter of groundnut oil. The

expansion in Latin American exports in recent years has mainly reflected

larger supplies from Argentina and Brazil. Exports from the United States

have expanded, particularly after the mid-1970s. These shipments were

obtained from stocks considered surplus to domestic requirements held by the

CCC (Commodity Credit Corporation). However, the United States remains the

world's leading exporter of groundnuts, with the bulk of its shipments

consisting of nuts of edible varieties.

The main market for groundnut oil continues to be the EC, Table IV-

C2. Among the importing countries where groundnut oil enjoys traditionally a

strong consumer preference as a table and cooking oil, France is by far the

largest market, with more than 47% of total world groundnut oil imports in

1980-81. Other significant importers are Italy, the Federal Republic of

Germany, Belgium-Luxembourg, Netherlands and the United Kingdom. Together

these markets account for some 90% of world imports.

Groundnut Meal: Table IV-C3 indicates that exports of groundnut meal have

also declined over time. India remains the largest exporter; its shipments

are controlled by export quotas set in order to ensure that only quantities

deemed to be surplus to domestic requirements are exported. Only solvent-

extracted meals can be exported. Other major exporters of groundnut meal are

Senegal, Sudan, Argentina and Brazil.

Table IV-Cl: GROUNDNUT OIL--EXPORTS BY MAIN COUNTRIES AND ECONOMIC REGIONS

Actual Share of World Total Growth Rate pCountries/Economies 1961 1965 1970 1975 1980 1981 1961 1965 1970 1975 1980 1981 1961-81

co

-------------- ('000 tons)…-------------- ---------…-------(%)------------------ (% p.a.)-

Industrial 30 57 48 85 98 88 10.6 13.7 11.2 21.5 20.3 26.7 4.7N. America 3 28 15 12 18 20 1.1 6.7 3.5 3.0 3.7 6.1 13.7United States 3 28 15 12 18 20 1.1 6.7 3.5 3.0 3.7 6.1 13.7

EC-10 27 29 33 72 78 67 9.5 7.0 7.7 18.2 16.2 20.4 3.5

France 6 12 20 44 15 9 2.1 2.9 4.7 11.1 3.1 2.7 1.4Germany 3 4 5 10 7 3 1.1 1.0 1.2 2.5 1.5 0.9 4.2

Netherlands 8 4 3 6 29 20 2.8 1.0 0.7 1.5 6.0 6.1 5.1United Kingdom 5 2 1 12 - - 1.8 0.5 0.2 3.0 - - -14.3

Centrally Planned 1 4 1 2 2 2 0.3 1.0 0.2 0.5 0.4 0.6 -1.7

Developing 253 354 378 309 382 239 89.1 85.1 88.5 78.2 79.3 72.6 0.5

Asia 18 15 15 22 23 67 6.3 3.6 3.5 5.6 4.8 20.4 -2.3China 5 5 7 13 18 62 1.8 1.2 1.6 3.3 3.7. 18.8 7.3

Africa 204 278 287 247 152 92 71.8 66.8 67.2 62.5 31.5 28.0 -2.0Nigeria 46 92 90 - - - 16.2 22.1 21.1 - - - -14.8

Senegal 126 143 146 197 74 20 44.4 34.4 34.2 49.9 15.4 6.1 -2.7South Africa 16 7 14 15 29 37 5.6 1.7 3.3 3.8 6.0 11.2 4.9Sudan 31 8 - 7 33 16 10.9 1.9 - 1.8 6.8 4.9 36.9

L. America 31 62 75 38 207 80 10.9 14.9 17.6 9.6 42.9 24.3 10.6Argentina 31 62 43 - 85 34 10.9 14.9 10.1 - 17.6 10.3 6.7Brazil - - 32 36 122 46 - - 7.5 9.1 25.3 14.0 1°.

WORLD 284 416 427 395 482 329 100.0 100.0 100.0 100.0 100.0 100.0 1.1

I-n

Source: FAO, Trade Yearbook Tapes.

Table IV-C2: GROUNDNUT OIL--IMPORTS BY MAIN COUNTRIES AND ECONOMIC REGIONS

co

Actual Share of World Total Growth Rate >

Countries/Economies 1961 1965 1970 1975 1980 1981 1961 1965 1970 1975 1980 1981 1961-81

----- ----- (000 tons)-------------- -----------------(% ------------ % p.a.)-

Industrial 209 322 364 331 452 294 75.5 76.1 83.9 77.3 88.3 86.0 1.7N. America 5 4 9 7 5 4 1.8 0.9 2.1 1.6 1.0 1.2 -1.7Canada 4 4 9 7 5 4 1.4 0.9 2.1 1.6 1.0 1.2 -1.5

EC-10 181 295 333 305 422 275 65.3 69.7 76.7 71.3 82.4 80.4 2.1Belgium-Luxem. 4 9 21 21 42 33 1.4 2.1 4.8 4.9 8.2 9.6 10.2France 115 156 143 180 248 161 41.5 36.9 32.9 42.1 48.4 47.1 2.7Germany, F.R. 19 49 52 38 39 26 6.9 11.6 12.0 8.9 7.6 7.6 -0.1Italy - - 8 24 42 20 - - 1.8 5.6 8.2 5.8 31.4

Netherlands 6 10 9 9 33 23 2.2 2.4 2.1 2.1 6.4 6.7 4.7United Kingdom 36 70 96 29 17 12 13.0 16.5 22.1 6.8 3.3 3.5 -7.8

Centrally Planned 9 - - 4 1 - 3.2 - - 0.9 0.2 - -0.6

Developing 59 101 70 93 60 47 21.3 23.9 16.1 21.7 11.7 13.7 -0.4Asia 21 26 24 24 39 34 7.6 6.1 5.5 5.6 7.6 9.9 1.8

Hong Kong 9 10 12 16 29 28 3.2 2.4 2.8 3.7 5.7 8.2 4.8Singapore 4 5 6 1 4 1 1.4 1.2 1.4 0.2 0.8 0.3 -3.4

Africa 25 10 17 8 16 9 9.0 2.4 3.9 1.9 3.1 2.6 0.2

L. America 6 25 15 41 2 3 2.2 5.9 3.5 9.6 0.4 0.9 2.3Venezuela 2 5 3 32 - 2 0.7 1.2 0.7 7.5 - 0.6 12.4

WORLD 277 423 434 428 512 342 100.0 100.0 100.0 100.0 100.0 100.0 1.3

Source: FAO, Trade Yearbook Tapes.

Table IV-C3: GROUNDNUT MEAL--EXPORTS BY MAIN COUNTRIES AND ECONOMIC REGIONS

Actual Share of World Total Growth Rate ;Countries/Economies 1961 1965 1970 1975 1980 1981 1961 1965 1970 1975 1980 1981 1961-81 E

- ------------ (000 tons)…-------------- -----------------(%)--------------------( p.a.)- X

Industrial 62 46 46 28 53 78 5.1 3.0 2.5 2.5 5.2 11.8 -1.4N. America - - - - 20 61 - - - - 2.0 9.2 26.4

United States - - - - 20 61 - - - - 2.0 9.2 26.4

EC-10 61 46 46 28 33 17 5.0 3.0 2.5 2.5 3.2 2.6 -5.2France 32 14 16 14 10 9 2.6 0.9 1.0 1.2 1.0 1.4 -5.3Germany 9 9 10 2 1 1 0.7 0.6 0.6 0.2 0.1 0.2 -9.1Netherlands 7 3 2 1 11 3 0.6 0.2 0.1 - 1.1 0.5 -3.5United Kingdom 1 - - 1 4 - - - - - 0.4 - 18.8Italy 3 7 13 11 3 - 0.2 0.5 0.8 1.0 0.3 - -6.8

Centrally Planned - 1 3 - - - - - 0.2 - - - 11.4

Developing 1,154 1,475 1,581 1,109 971 583 94.9 97.0 97.0 97.5 94.9 88.2 -1.9Asia 571 817 808 607 472 365 47.0 53.7 49.6 53.4 46.1 55.2 -1.8

Burma 140 67 40 18 5 2 11.5 4.4 2.5 1.6 0.5 0.3 -15.9India 422 735 762 579 459 343 34.7 48.3 46.7 50.9 44.9 51.9 -0.8

Africa 341 397 488 433 306 131 28.0 26.1 30.0 38.1 29.9 19.8 -1.4Nigeria 76 115 162 7 1 - 6.3 7.6 9.9 0.6 0.1 - -22.8Senegal 181 196 200 312 99 26 14.9 12.9 12.3 27.4 9.7 3.9 -1.7South Africa 29 16 25 22 - - 2.4 1.1 1.5 1.9 - - -3.4

Sudan 26 18 37 32 164 75 2.1 1.2 2.3 2.8 16.0 11.3 7.4

L. America 243 260 286 69 192 87 20.0 17.1 17.5 6.1 18.8 13.2 -3.2Argentina 107 132 65 33 87 38 8.8 8.7 4.0 2.9 8.5 5.7 -3.0Brazil 113 122 201 36 101 46 9.3 8.0 12.3 3.2 9.9 7.0 -2.7

WORLD 1,216 1,521 1,630 1,137 1,023 661 100.0 100.0 100.0 100.0 100.0 100.0 -1.8

Source: FAO, Trade Yearbook Tapes.

January 1984 IV-18

World imports of groundnut meal are also largely concentrated in

industrial countries, primarily in the EC countries and mainly in France, the

United Kingdom and the Federal Republic of Germany; although the centrally

planned economies are also significant importers of groundnut meal, Table IV-

C4.

Table IV-C4: GROUNDNUT MEAL--IMPORTS BY MAIN COUNTRIES AND ECONOMIC REGIONS

Actual Share of World Total Growth RateCountries/Economies 1961 1965 1970 1975 1980 1981 1961 1965 1970 1975 1980 1981 1961-81

------------ ( 000 tons)-------------- ------ (%)----------------- -(% p.a.)-

Industrial 1,021 1,104 1,061 653 780 318 82.9 68.4 60.4 55.5 67.1 44.6 -2.8

EC-10 933 945 806 608 770 313 75.7 58.6 45.9 51.7 66.3 43.9 -2.3Belgium-Luxem. 37 34 53 32 61 32 3.0 2.1 3.0 2.7 5.2 4.5 1.3Denmark 57 94 - - - - 4.6 5.8 - - - - 37.6

France 78 191 243 254 387 75 6.3 11.8 13.8 21.6 33.3 10.5 4.2Germany, F.R. 88 112 115 82 149 157 7.1 6.9 6.5 7.0 12.8 22.0 -0.6Netherlands 43 19 12 9 29 14 3.5 1.2 0.7 0.8 2.5 2.0 -4.7Norway 36 50 54 - - - 2.9 3.1 3.1 - - - -10.3

Sweden 37 54 43 - - - 3.0 3.3 2.4 - - - -30.8

United Kingdom 604 489 374 211 80 10 49.0 30.3 21.3 17.9 6.9 1.4 -10.3

Italy 8 - - 9 26 20 0.1 - - 0.8 2.2 2.8

Japan - 37 142 259 - - - 2.3 8.1 22.0 - - -19.2

Centrally Planned 209 498 659 462 251 283 17.0 30.9 37.5 39.3 21.6 39.7 -2.4E. Europe 144 410 559 392 162 169 11.7 25.4 31.8 33.3 13.9 23.7 -2.4USSR 65 88 99 70 89 114 5.3 5.5 5.6 5.9 7.7 16.0 -5.1

Developing 2 11 37 61 131 112 0.2 0.7 2.1 5.2 11.3 15.7 23.1Asia - - 10 47 54 52 - - 0.6 4.0 4.6 7.3 41.3Africa 2 11 21 11 20 13 0.2 0.7 1.2 0.9 1.7 1.8 7.1

WORLD 1,232 1,614 1,756 1,176 1,162 713 100.0 100.0 100.0 100.0 100.0 100.0 -1.9

Source: FAO, Trade Yearbook Tapes.

January 1984 IV-20

SELECTED REFERENCES

FAO, "Food Balance Sheets and Per Caput Food Supplies," (FAO: Rome, 1980).

Labys, W.C., "Multicommodity Substitution Patterns in the International Fatsand Oils Market," European Review of Agricultural Economics 4(1),1977.

Rojko, et al., "Alternative Futures for World Food in 1985," USDA, ForeignAgricultural Economic Report No. 146, 1978.

FAO, "Recent Developments in the World Groundnut, Groundnut Oil and MealEconomy," (FAO: Rome, March 1982).

January 1984 V-1

V. MARKETING AND MARKET PRICES

A. Marketing

Production and marketing constraints occur at both the domestic and

international level. This is, perhaps, best exemplified by Nigeria, which was

the most important groundnut producer in Africa in the 1950s and 1960s.

Groundnuts are a scheduled crop in Nigeria, i.e., it is sold and

bought through an organized marketing authority. Formerly, this authority was

comprised of the various Marketing Boards. The original objective of

establishing the Marketing Boards was to stabilize producer prices and to

improve the organization of marketing; but the Boards were principally used as

an instrument for taxing agriculture through export and produce sales taxes.

1/ The emphasis on raising revenues resulted in producer prices being set

well below the equivalent world price, Table V-Al. As might be expected,

export crop (including groundnut) producers had little incentive to expand

production. (Apart from lack of producer incentive, drought and disease have

also contributed to the decline in the Nigerian groundnut industry.)

To encourage greater smallholder production of export and food crops,

the old Marketing Board system was reorganized in 1977. A principal objective

of the new Commodity Boards (including the Nigerian Groundnut Board) was to

encourage greater production through raising producer prices. The newly

constituted Boards, however, no longer enjoy monopsonistic powers since it is

no longer mandatory for producers to sell to the Boards, although the Boards

retain monopoly rights over exports.

Producer prices for groundnuts have been substantially raised,

particularly in 1980, Table V-Al, but the Groundnut Board has done little

actual buying. It appears that the increase in purchase price may not provide

1/ Agricultural Sector Survey, 1973.

January 1984 v-2

Table V-Al: NIGERIA--GROUNDNUT PRICES

Year Producer Price C.i.f. European Ports

---- (N/mt) ----- ($/mt) (N/mt) /a

1960/61 75 197 1411965/66 68 206 1471970/71 63 230 1641971/72 67 249 1771972/73 80 261 1721973/74 92 393 2591974/75 165 607 3821975/76 250 452 2781976/77 250 424 2651977/78 275 551 3551978/79 290 618 3931979/80 350 564 3081980/81 420 493 2721981/82 450 636 351

/a Computed on the basis of N1=$1.81.

Source: Producer Price - Nigerian Groundnut BoardC.i.f. European Ports - Oil World.

an adequate production incentive if official prices are lower than prices

offered by private buyers, the local currency (naira) is overvalued, producer

prices are not keeping up with the domestic inflation rate, or the producer

prices paid for competing food crops are deemed by groundnut producers to be

more remunerative.

Nigeria provides a good illustration of the adverse interacting

effects of high domestic inflation and an overvalued currency. The official

price for groundnuts in 1980 increased by 20 percent while inflation was 25

percent. Since the naira is overvalued by an estimated 40 percent, even

prices well above world market prices provide a relatively weak production

incentive.

January 1984 V-3

Furthermore, as minimum wages in Nigeria have risen (reflecting the

effect of oil revenue increases and the policy of distributing oil wealth more

widely), production costs have steadily increased. Field surveys indicate

that it cost between N350-400 to produce a ton of groundnuts in Nigeria in

1978. 1/ The official purchase price for groundnuts then was N290. (It was

raised to N420 in 1980.) However, in 1978 it cost the groundnut Board N136.7

to purchase a ton of groundnuts, or about 25 percent of the producer price.

There is broad consensus that the private marketing system in Nigeria

is relatively more efficient. To quote a recent Bank report on the subject:

"Within the limits set by physical factors--in particular the limitations of

natural road networks--farmers receive a fair share of the final produce of

their product. The system, in short, is competitive, non-exploitative and

reasonably efficient." 2/ The same report further stated that "it is also

extremely unlikely that statutory marketing bodies can in general produce

lower operating costs or more astute marketing strategies than results from

the operation of the private sector."

Marketing practices have been liberalized and exchange rates devalued

in Sudan and Senegal, the two major groundnut producing countries in Africa.

3/ Sudan abolished dual exchange rates, and all imports were moved to a

unified and lower rate of $1=0.90 Sudanese pound in 1981. This represented a

45 percent devaluation of the official pound against the dollar, but only a 11

percent decline against the parallel rate (indicating the magnitude of the

devaluation was not sufficient to eliminate the parallel rate). To reduce the

expense of government involvement, oilseed marketing has been denationalized

and placed with private traders, with no price controls. In the case of

1/ Modern Agricultural Industries and Consultancies, "Proposals for Groundnutand Cotton Rehabilitation in Nigeria," (Ibadan, 1978).

2/ IBRD, Agricultural Marketing and Prices in Nigeria, 1979.

3/ USDA, Sub-Saharan Africa: Review of Agriculture in 1981 and Outlook for1982, (Washington, D.C.: USDA, 1982).

January 1984 V-4

Senegal, the state marketing agency, ONCAD, was abolished in 1981 and farmers

are free to sell their groundnuts to private traders. However, the government

has taken control of the country's groundnut oil industry by buying leases on

three crushing facilities.

B. Market Prices

Technically, most fats and oils are highly interchangeable. In

practice, however, refining costs and specific end use requirements tend to

limit the range within which individual fats and oils are actually

substituted. The need for certain chemical components (e.g., fatty acids) or

certain physical properties (e.g., flavor, color, smell, melting point) in a

specific end-use gives the oil or fat which has these components or properties

a competitive edge over other fats and oils for that end-use. Thus, although

groundnut oil does not possess technical properties which enable it to

dominate any major specific end-use, some consumers regard it as a "high

quality" edible oil because of certain taste characteristics, and it has

tended to command a higher price than most other soft oils in the free market,

with the exception of olive oil. The size of the premium has depended on

other market factors as well, notably difficulties relating to supply. The

exceptionally high prices in 1974 and 1978 reflect the sharp reduction in

groundnut production in West Africa caused by drought and disease, while the

high 1981 price is a reflection of the drought-reduced 1980 groundnut crop in

the US, Table V-Bl. In large measure, the world price for groundnut oil can

be said to be determined by the interaction of the size of the groundnut crop

in Africa and the US, the quantities demanded in Western Europe and the

availability of competing products.

Prices for groundnut meal, which is readily substitutable by other

oilmeals, have kept a fairly close relationship with other oilmeals, remaining

below those of soybean meal and fishmeal--both of which have a higher protein

content.

Tables V-B2 to V-B4 indicate that there is generally a close

relationship between the international market prices of groundnut products and

the export unit values of these products in the main exporting countries.

January 1984 V-5

Table V-B1: PRICES OF GROUNDNUT PRODUCTS

Grountnuts Groundnut Oil Groundnut MealEurope Export Unit Rotterdam Export Unit Rotterdam Export Unit

Value Value ValueIa /b /c /b /d /b

1955 190 288 1121956 214 370 110

1957 203 360 981958 165 276 871959 182 300 101

1960 197 326 981961 196 183 331 344 93 651962 171 178 275 298 102 731963 172 173 268 306 196 771964 187 180 315 328 108 79

1965 206 192 324 323 119 851966 190 189 296 307 111 811967 180 174 283 314 111 821968 167 159 271 262 105 821969 207 191 332 310 101 81

1970 230 205 379 333 123 861971 245 229 441 378 116 811972 261 252 426 363 144 871973 393 323 546 421 305 1831974 607 488 1,077 923 174 155

1975 452 495 857 760 140 1191976 424 443 741 670 176 1221977 551 594 852 793 218 1821978 618 620 1,079 909 205 1611979 565 580 888 869 211 173

1980 493 482 859 677 241 1761981 636 622 1,043 900 239 175

/a Nigerian, shelled, c.i.f. UK; beginning August 1976, any origin, shelled,(c.i.f. Europe).

/b Developing countries export unit value.

/c Nigerian/West African, bulk, c.i.f. UK; beginning February 1977, any origin,c.i.f. Rotterdam.

/d 48% Indian, c.i.f. Rotterdam.

Source: Oil World, UNCTAD, USDA.

January 1984 V-6

Table V-B2: REGRESSION RESULTS BETWEEN EXPORT UNIT VALUES OF GROUNDNUTPRICES IN SELECTED COUNTRIES AND INTERNATIONAL

MARKET PRICES OF GROUNDNUTS, /a 1961-81

Country Constant Coefficient R2(a) (b)

Argentina 117.33 0.87 0.53(1.66) (4.51)

Brazil -88.25 1.67 0.78(-1.20) (8.17)

China PRC 0.23 1.34 0.79(0.00) (8.63)

Egypt 22.36 1.73 0.87(0.41) (11.40)

Gambia -0.095 0.95 0.84(-0.00) (9.91)

Guinea-Bissau -35.0 0.93 0.83(-1.01) (9.73)

India 1.99 1.33 0.68(0.03) (6.40)

Indonesia 22.91 0.62 0.72(0.72) (6.91)

Mali -69.11 1.15 0.80(-1.46) (8.78)

Mexico 242.65 0.23 0.42(10.83) (3.70)

Mozambique 132.59 0.61 0.49(2.61) (4.27)

South Africa 3.36 1.00 0.61(0.05) (5.41)

Senegal -123.85 1.64 0.83(-2.05) (9.77)

Sudan -24.41 1.18 0.70(-0.38) (6.65)

Thailand -7.59 1.64 0.72(-0.08) (6.95)

Viet Nam 28.93 1.04 0.92(1.21) (15.71)

Malawi -15.09 1.18 0.72(-0.26) (7.03)

/a Nigeria, shelled, CIF UK; beginning August 1976, any origin, shelled,CIF Europe.

Figures in parentheses are t-values.

Source: Calculated from FAO figures.

January 1984 V-7

Table V-B3: REGRESSION RESULTS BETWEEN EXPORT UNIT VALUES OFGROUNDNUT OIL PRICES IN SELECTED COUNTRIES AND INTER-NATIONAL MARKET PRICES OF GROUNDNUT OIL, /a 1961-81

Country Constant Coefficient R(a) (b)

Argentina 38.28 0.87 0.80(0.63) (8.74)

Brazil 3.95 0.93 0.78(0.05) (7.89)

China PRC 117.9 0.87 0.72(1.58) (6.99)

Gambia -15.03 0.98 0.86(-0.25) (10.27)

India 196.15 0.83 0.64(2.28) (5.79)

Mali 146.79 0.77 0.81(2.86) (8.97)

South Africa 209.45 0.51 0.57(3.45) (5.01)

Senegal 107.89 0.88 0.73(1.46) (7.18)

Zimbabwe 29.49 0.92 0.69(0.34) (6.52)

/a Up to and including January 1977, Nigerian/West African, bulk, CIF UK;beginning February 1977, any origin, CIF Rotterdam.

Figures in parentheses are t-values.

Source: Calculated from FAO figures.

January 1984 V-8

Table V-B4: REGRESSION RESULTS BETWFEN EXPORT UNIT VALUES OFGROUNDNUT MEAL PRICES IN SELECTED COUNTRIES AND INTER-NATIONAL MARKET PRICES OF GROUNDNUT MEAL, /a 1961-81

Country Constant Coefficient R2(a) (b)

Argentina -11.06 0.84 0.871(-0.87) (11.31)

Brazil 1.78 0.74 0.82(0.13) (9.32)

Mozambique 11.69 0.69 0.61(0.54) 5.44)

Paraguay -7.15 0.57 0.57(-0.37) (5.01)

Senegal -20.23 0.85 0.68(-0.89) (6.32)

Sudan 7.62 0.61 0.68(0.46) (6.31)

Thailand -16.40 1.09 0.62(-0.49) (5.52)

/a 48% Indian, CIF Rotterdam.

Figures in parentheses are t-values.

Source: Calculated from t-values.

January 1984 VI-1

VI. SPECIAL ISSUES

Barriers to Trade and Protection

A. Tariffs

Groundnuts and groundnut meal are generally imported duty-free into

most industrial countries. The main exception is the United States which

imposes a relatively high duty of $154/ton on imports of groundnuts, Table VI-

Al. It will also be seen from the table that only Canada grants GSP tariff

cuts on crude oil. Moreover, the duty on refined oil is invariably higher

than that for crude oil.

Under the Lome Convention, imports of most products, including

groundnut products are admitted into the EC duty free. Among the main

developing country exporters, Senegal, Sudan and Gambia benefit most from the

EC-ACP scheme. However, neither they nor the Latin American exporters

(Argentina and Brazil) have obtained any substantive GSP benefits.

B. Non-Tariffs

In addition to the high duty on groundnut imports, the United States

also imposes quantitative restrictions on the importation of groundnuts into

the country. The United States, as part of an overall groundnut policy,

generally restricts imports of groundnuts to 775 tons (shelled) per year. 1/

The US groundnut policy, in effect, reserves the domestic market for its own

producers as well as providing them with income support. Import quotas on

groundnuts are also fixed by Japan.

1/ The import quota was raised by the United States to 91,700 tons for the1980/81 marketing year, following the sharp fall in the 1980 domesticharvest, which yielded 1 million tons compared with 1.8 million in 1979.

January 1984 VI-2

Table VI-Al: EEC-9--SUMMARY OF IMPORT DUTIES APPLICABLE IN 1982UNDER THE COMMON CUSTOMS TARIFF (CCT), THE GENERALIZEDSYSTEM OF PREFERENCES (CSP) SCHEME AND THE SCHEMEFOR AFRICAN, CARIBBEAN AND PACIFIC (ACP) COUNTRIES

ConventionalRate of Dutyunder GATT GSP ACP

------- % rates, ad valorem--------Vegetable Oilseeds 0 0 0

Vegetable Oils- Crude, Industrial 4-5 2.5 0- Refined, Industrial 8 6.5 0- Crude, Edible 6-10 4 0- Refined, Edible 15 1/ 12 0- Olive Oil -- -- --subject to levy------

Animal Fats and Oils- Industrial 0 0 0- Edible 6-8 3-5 0

- Butter) -------subject to levy---- ----- Lard)

Fish Oil 0 0 0

Animal or Vegetable Fats and Oils 17 1/ 11-16 0(hydrogenated or hardened)

Margerine 25 250

Other Processed Fats and Oils Products 0-8 0-6 0(Fatty Acids, Fatty Alcohols,Glycerols, Waxes, Degras)

Oilmeals- Vegetable Oilmeals 0 0 0- Fishmeals 2 0 0

1/ For these categories, the rate is higher at 20% for containers of 1 kg orless: the relevant GSP rates are 18%, edible oils and 16% for hydrogenatedor hardened fats and oils.

Notes:1. For a full breakdown, see:

- GATT rates Official Journal L 335 Regulation No. 3300/81, Nov. 23, '81.- GSP rates Official Journal L 365 Regulation No. 3603/81, Nov. 23, '81.

2. The GSP rates shown are averages of the different rates on individual oilsand do not take account of the fact that some oils (such as crude orrefined groundnut oil) are not granted any reduction.

3. The rates shown are not yet all applicable for Greece, where the rates ofduty will not be fully aligned with those of the EEC-9 until the end ofthe Greek transitional period in December 1985.

Source: FAO (1981).

January 1984 VI-3

Apart from direct quantitative restrictions, many importing

countries, including the United States, Japan, Australia, Canada and the EC

countries, have imposed stringent regulations to cope with the problem of

aflatoxin in groundnut products.