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Groundnut exports unlikely to improve despite lifting of ban by Vietnam

India may not even achieve last year's export numbers, let alone surpass them, due to overall slack in international market

BS Reporter  |  Ahmedabad 

Groundnut exports unlikely to improve despite lifting of ban by Vietnam

Despite Vietnam lifting its ban on Indian groundnut imports, India is finding it tough to match last year's export figure. This is due to the overall slack in demand for the commodity in the international market.

Earlier, Vietnam had placed a ban on Indian groundnut over poor quality issues. It recently lifted the ban, allowing imports of groundnut from India after lobbying by the Indian Oilseeds and Produce Export Promotional Council (IOPEPC). However, according to industry players, this will not help much in touching even last year's total export mark, leave alone registering a growth.

As per IOPEPC data, during 2014-15, India had exported 708,390 tonnes groundnut and this year, the country's export have so far been 219,739 tonnes groundnut in first seven months of 2015-16 as against 281,898 tonnes in corresponding period last year. According to industry sources, groundnut exports may not cross 500,000 tonnes mark by end of March this year.

In terms of Vietnam, the data showed that India had exported about 148,000 tonnes to Vietnam alone, thereby forming 26 per cent of total Indian groundnut exports during 2014-15. According to exporters, some fresh demand from Vietnam may generate in near future. However, a ban of last 9-10 months has created a void which is not likely to be fulfilled this fiscal.

"Import banned by Vietnam is the one of the major reasons for sharp fall in groundnut export from India this year. The country had banned groundnut import from April 2015 as it had found pests in Indian consignments.

By end of March, country's total export is likely to be about 500,000 tonnes this year", said Sanjiv Sawla, chairman of IOPEPC.

Cautioning the exporters, Sawla stressed on the need to focus on quality of groundnuts since more and more countries are applying stringent norms on imports of food products considering the quality standards and food safety systems.

Vikram Duvani, managing director of Rachana Seeds Industry said, "Crop size was lower last year and domestic consumption was good which increased the groundnut price. Competing countries are offering cheaper rates. All this translated into lower export from the India."

Competing countries like Africa, Argentina, Brazil and the US offer groundnut at about $950-1,100 per tonne while India's groundnut prices are ruling at $1,000-1,150 per tonne in international market.

Country's export have decreased by 22 per cent to 219,739 tonnes groundnut in first seven months of 2015-16 as against 281,898 tonnes in corresponding period last year. IOPEPC data suggests that out of 281,898 tonnes export in the corresponding period 2014-15, Vietnam was the second largest importer with 43,983 tonnes after Indonesia that had imported about 102,230 tonnes. On the other side, demand from Indonesia has also decreased about 36 per cent to 65,602 tonnes in April to October period. Industry sources said that overall weak economy has affected the trade this year.

The council needs to closely examine the procedure for groundnut shipments to Vietnam. Preliminarily, it appears that the procedure is complex. Processors and exporters will have to take extra precaution for groundnut shipments to Vietnam. This positive development will boost exports of Groundnuts from India, said Mumbai based exporter.

First Published: Thu, January 21 2016. 12:36 IST
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