Vietnam bans groundnut import from India

With no prior signals, exporters see ban as drastic & arbitrary, fear other markets will follow suit

Fourteen months after lifting the ban on groundnut imports from India, Vietnam has imposed a temporary restriction on the commodity over quality issues. Groundnut contributes a little over five per cent to India's overall agri trade registered with the Agricultural & Processed Food Products Export Development Authority (Apeda).

Following a similar ban that was imposed by the government of Vietnam in 2015, trade officials from India and Vietnam mutually agreed on a standard operating practice (SOP) under which units registered with the plant quarantine (PQ) department were allowed to export groundnut from India. Presumably, these units comply with the hygiene and other sanitary requirements.

After a stringent quality specification was set between the officials of the two countries, Vietnam opened up its market to Indian exporters in January 2016. Despite mutually agreed quality specifications being in place, the plant quarantine department used to carry out continuous monitoring of export-oriented units for fumigation and other quality aspects of exportable shipments.

Groundnut exports to Vietnam
Financial year	Quantity (tonnes)	Value ($ mn)
2013-14	40,466.00	38.63
2014-15	1,83,771.04	202.27
2015-16	18,418.00	20.07
Source: Apeda

“The shipment of Indian groundnut was taking place only after all precautions were in place under the strict monitoring of the plant quarantine department of Vietnam. Interestingly, no complaints were registered by Vietnamese buyers whatsoever about quality or any other issues. Still, Vietnam imposed the ban on imports from India,” said Sanjiv Sawla, Chairman, the Indian Oilseeds and Produce Export Promotion Council (IOPEPC).

The ban assumes significance, as it might spill over to other countries. With a mere 18,418 tonnes of imports worth about $20 million, Vietnam has slipped to sixth place in 2015-16 in terms of import of groundnut from India, from first in 2014-15. Vietnam had imported 183,771 tonnes of the commodity worth $202 million followed by Indonesia (183,355 tonnes, $191 million) in 2014-15.

Indonesia restored its first rank with 173,966 tonnes ($201.55 million) in 2015-16 followed by Malaysia with 72,211 tonnes ($89.37 million), Thailand (63,048 tonnes,$74.41 million), Philippines (50,699 tonnes, $60.90 million) and Pakistan with an import quantity of 34,403 tonnes ($28.73 million), according to data compiled by Apeda.

“The trade had no previous warnings about this ban, which it finds drastic and arbitrary in nature. The only saving grace is that Vietnam has opened a 60-day window to allow contracts that are in the pipe line, Sawala said."

He added, “With this ban, Vietnam may look at other agri products coming from India more suspiciously. More importantly, it sends a wrong signal to the international groundnut trade and the world as a whole about India’s image as quality supplier of peanuts.”

India exports about 500,000-700,000 tonnes of groundnut worth $500-700 million every year. Its groundnut exports jumped by a staggering 29.58 per cent between April 2016 and January 2017 over the corresponding period last year on strong demand from other destinations.

Data compiled by Apeda showed India’s groundnut exports at 574,230 tonnes during the April 2016-January 2017 period, up from 432,997 tonnes during the corresponding period a year earlier.