Indonesia raises quality issue for groundnut export

After Vietnam raised concerns over the quality of groundnut shipments from India, the plant quarantine department in Indonesia has restricted its import from India due to discovery of aflatoxins. These are poisonous and cancer-causing chemical produced by certain moulds which grow in soil, decaying vegetation, hay and grain.

Indonesia has also sought testing for aflatoxin and pesticide residues in groundnut consignments from India. For which, their authorities have approved only six of 21 laboratories registered with our Agricultural and Processed Food Products Export Development Authority (Apeda). With this inadequate number of laboratories approved by the Indonesian authorities, exporters here are facing delays up to three weeks for certification of containers. "We have sought approval for more laboratories from the Indonesian authorities of the 21 registered with us. We have noticed exporters facing congestion in getting certification for groundnut consignments," said a senior Apeda official.

India's groundnut exports stagnated at 536,929 tonnes in 2015-16, after a sharp decline from 2013-14 when these were a record of 708,386 tonnes, worth $760 million. Indonesia is the second largest destination of India's groundnut export, after Vietnam. Apeda data show groundnut export to Indonesia was 173,966 tonnes ($202 mn) in the first 11 months of 2015-16, as compared to 183,355 tonnes ($191 mn) the previous year.

Exports to Vietnam face problems due to discovery of 'Olivier' bugs in some consignments. Apeda has urged the Vietnamese authorities to accept consignments after fumigating the container once more.

"Indonesian authorities have sought additional certification of pesticide residues in consignments, which has raised the cost of certification to Rs 14,000 a container now from Rs 3,000 a container before they made these tests mandatory," said Sanjay Shah, a city-based groundnut exporter. As against earlier random testing of bags, Indonesian authorities seek certification of tests of all bags separately.

Its real impact on exports would be felt in the coming months if Indian exporters do not adhere to global quality norms. According to a senior official of the Indian Oilseeds and Produce Export Promotion Council (IOPEPC), the government has convened a meeting of leading groundnut exporters here on June 23.

Sanjiv Sawla, chairman of IOPEPC, had earlier said our groundnut exports were already under a threat due to higher prices in local markets than abroad. Production also fell due to last year's poor monsoon, to an estimated 3.2 mn tonnes in the kharif of 2015 from 3.5 mn tonnes for the corresponding period last year. Lower output had increased groundnut prices in the domestic market by 15 per cent to between Rs 80,000 and Rs 95,000 per tonne.