Groundnut exporters face order cancellation

Delay in shipment and disparity with international prices add to the worry

Even as groundnut exporters struggle to comply with the new norms notified by the Agricultural and Processed Food Products Export Development Authority (Apeda), the industry is facing cancellation of orders from buyers due to delay in shipments.

Trader sources noted that obtaining certification from the competent authorities caused delay, putting the exporters in a tight spot.

According to insiders, after the enforcement of the newly-introduced regulations, the registrations of export consignments have started but at a sluggish pace.

Trader sources maintained that groundnut exports have fallen by almost half, while prices have reduced by around 25 per cent.

Industry data showed that India exported around 58,000 tonnes of groundnut between February 9 and March 31. Data provided by Apeda showed that groundnut exports were 455,415 tonnes between the April-January in FY13, compared to 673,486 tonnes registered in the same period in FY12.

“Earlier, groundnut consignments could be ready in a few days of placing an order and the shipment would go in about 10 days. But now, it is taking around one week to obtain a certificate. This is causing delay in shipments,” said Kunal Kotecha of VNKC Agrocom, a groundnut exporter from Saurashtra.

It is also learnt that buyers have started arm-twisting the exporters to negotiate prices due to delay in shipments.

“The demand is less. And when your shipment gets delayed, the buyer will start arm-twisting for cheaper prices,” said a groundnut exporter from Tamil Nadu.

“Many groundnut processing centres are located at remote places, where there is no laboratory nearby. In such cases, too, units have to depend on labs located in big cities. This causes avoidable delay,” said a groundnut trader located at Villupuram in Tamil Nadu.

In the domestic market, groundnut prices have fallen from Rs 84 a kg in January to around Rs 64 a kg now. Internationally, too, the prices have corrected by around $100 per tonne over a fortnight alone.

According to industry sources, already 600,000 bags (each 50kg) of groundnut have been stocked at the southern markets. “Buyers are taking undue advantage of the situation in India. On the one hand, there are regulatory issues and on the other, demand is turning weak,” said another exporter from Chennai.

With weak demand and falling prices, industry players fear there would be an increased supply of groundnut in the domestic market, which might further push the prices down. Adding to the woes is the increasing arrivals of groundnut in the southern markets.

In January, Apeda in its notification had made it clear that all the groundnut exporters from India should register with it and obtain a quality certificate from the competent authority.