Peanut exports to drop 20%

Quality issues and foreign competition to take their toll

Quality issues and low profit margins are likely to pull down the country's groundnut exports by 20 per cent in 2005-06.

According to Indian Oilseeds and Produce Exporters Association, exports during April 2005- November 05 had come down to 80,000 tonne against 1.03 lakh tonne during the year-ago period.

Despite the fall in exports, production is likely to go up to 64.5 lakh tonne in 2005-06 from last year's 60.7 lakh tonne.

Earlier, the industry had expected a whopping 20 per cent growth in exports because of a bumper kharif in major producer states"" Gujarat and Karnataka. The acreage of sowing of kharif crop was also high this year and the farmers got the advantage of good weather.

Exports of groundnut in April 2004-March 2005 was 1.67 lakh metric tonne, valued over Rs 500 crore. Indonesia, the largest importer of Indian groundnut, had sourced 62,586 MT from India last year followed by Malaysia (45,229 MT). UK, Philippines and Singapore are the other major importers.

"In the export sector, competition is increasing because of high production across groundnut producing countries. US, Argentina, China and Vietnam are posing a threat to Indian exporters. The challenge for Indian producers is to improve the quality of seeds," a market source said.

Gujarat, Karnataka, Andhra Pradesh, Maharashtra, Tamil Nadu and Orissa are the major producers of groundnut in India. Of these, only Gujarat has two cropping seasons.

Domestic exporters are not getting adequate supplies for export because of high domestic consumption, the source said.

"This year, farmers got more yield per shell because of good showers. Owing to the un-seasonal rains in the beginning farmers were confused if they should sow groundnut or shift to cotton," the source said.