Dealing of Agrocommodities in India for Export Purpose

8/4/2019 Dealing of Agrocommodities in India for Export Purpose

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GRAND PROJECT

REPORT

ON

DEALING OF AGROCOMMODITIES IN INDIA

FOR EXPORT PURPOSE

SUBMITTED TO: SUBMITTED BY:

PROF: S.C. REDDY MAHESH VALA (85)

KETAN SATODIYA (74)

HEMANT MAKWANA (34)

S. K. PATEL INSTITUTE OF MANAGEMENT AND COMPUTER STUDIES

GANDHINAGAR


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Introduction:

Indian agriculture provides a unique perspective of economic developmentthat has overcome the problems of food scarcity and has yet not been able toexploit the opportunities available in the untapped potential.

Indian agriculture is bestowed with large arable and potentially fertile land(the second largest in the world). However, productivity is low. By andlarge, the country has a congenial climate and yet the agrarian sector isvulnerable to vagaries of the monsoon.The Marketing infrastructure is underdeveloped and there exists a complexvortex of interventions in the prices and distribution of commodities.

Groundnut a premier oil seed crop in India. Groundnut is widely cultivatedas staple food in tropical and subtropical developing countries providing a

valuable source of proteins, fats, energy, and minerals. Most of the worldsgroundnut is produced and consumed in developing countries. Groundnutshold 33% share of total oil seeds. About 48% of the world output is for fooduses and 52% crushed, producing oil and cake, less then 6% of the worlds

production is exported.

India & China together produce almost 2/3rds of the world crop.Historically, the largest producer of peanuts in the world was India, but

production in China overtook Indian production in the mid-1990s. For theperiod 1996 to 2000, China produced almost 40% of the world crop, andIndia almost 25%, with the U.S. in 3rd place with almost 6%. Worldwide,about 2/3rds of the crop is processed for peanut oil. 20% of the world's

peanut production is used in candy. Peanut oil accounts for 8% of theworlds edible oil production. Peanuts are also called goobers, goober peas,

pindars, groundnuts, earthnuts, monkey nuts, and grass nuts. Peanuts containabout 28% protein, 50% oil and 18% carbohydrates.


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TYPES OF GROUNDNUT KERNELS:

There are two main types of groundnut kernels.1) Bolds2) Javas

Area of Production:

Groundnut is produced in various states in India. The state wise productionof Groundnut in various states of India from 1992 2001 is given in

Major States by Area

States 1992-93 1993-94 1994-95 1995-96 1996-97 1997-98 1998-99 1999-00 2000

India 8166.4 8321.7 7848.6 7524 7596.4 7088.2 7396 6867.3 67

Gujarat 1884 2053 1914 1902.9 1835 1926.2 1940.8 1826.5 1

Andhrapradesh 2372.4 2351.8 2176 2220.2 2203 1834.4 1992 1795.1 18Karnataka 1045.2 985.4 960.5 1191.9 110.3 1040.4 1230 1120.5 1

Tamilnadu 1188.4 1158.3 1079.9 933.4 901.5 270.8 858.1 759.3 8

Maharashtra 652.2 652.2 602.6 511 575.7 532.4 520.7 540 4

Rajasthan 240.4 286.4 249.9 216.2 245.3 328.9 331.9 274.7

Madhyapradesh 233.8 219.2 236.1 220.1 222.8 221.8 216.5 223.6 2

Uttarpradesh 116 134.4 135.8 129.3 140.2 135 127.2 113.7

Orissa 112.1 100.1 87.3 91.1 96.6 84.5 83.4 79.4

Chhattisgarh 21.7 43.9 30 31.1 39.5 32.5 34.1 35

Major States by Production

States 1992-93 1993-94 1994-95 1995-96 1996-97 1997-98 1998-99 1999-00 2000

India 8560 7830 8061.6 7579.4 8642.9 7370 8981.6 5258.1 62

Tamilnadu 1766.3 1865.6 1762.4 1520.3 1438.3 867.6 1569.8 1318.2 14

Andhrapradesh 1964.8 2545.6 1670.7 2625.7 2045 1155.9 2155 1089.2 20

Karnataka 826.7 809.5 661.6 1138.7 916.6 706.6 1192.1 768.6

Gujarat 2068.4 676.6 2305 1028.3 2449 2615.9 2577.8 717.5 6

Maharashtra 755.1 761 629.2 576.4 755.9 565.8 633.6 572 4

Rajasthan 268.2 208.6 197.5 164.8 272.9 368.9 362 265.2

Madhyapradesh 247.2 209.9 188.7 228 223.2 223.8 233.4 222.4 2

Uttarpradesh 106.8 114.7 95.4 94.9 132.1 120 82 94.4

Orissa 108.2 114 98.2 92.3 78.8 91.4 71.8 72.6

West Bengal 23 21.1 26.3 42.1 26.4 38.7 35 45.8

Groundnut Statewise Details 1991-2001


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Andhra Pradesh Bihar Chhattisgarh

Area Production Yield Area Production Yield Area Production Yie

('000ha) ('000 tns) (kg/ha) ('000ha) ('000 tns) (kg/ha) ('000ha) ('000 tns) (kg

1991-92 2481 2151.8 867 0.3 0.2 774 37.7 34.5

1992-93 2372.4 1964.8 828 0.3 0.2 717 21.7 25.9

1993-94 2351.8 2545.6 1082 0.5 0.5 990 43.9 39.2

1994-95 2176 1670.7 768 0.9 0.9 1016 30 25.6

1995-96 2220.2 2625.7 1183 0.4 0.4 923 31.1 31.4

1996-97 2203 2045 928 0.2 0.3 1287 39.5 37.5

1997-98 1834.4 1155.9 630 0.3 0.3 1011 32.5 39.8

1998-99 1992 2155 1082 0.3 0.3 1119 34.1 34

1999-00 1795.1 1089.2 607 - - - 35 -

2000-01 1865.3 2034.8 1091 - - - 31 29


Gujarat Haryana Jharkhand



1991-92 1941.9 699.7 360 2.3 1.7 739 4.8 3.7

1992-93 1884 2068.4 1098 1.9 1.3 684 3.6 2.8

1993-94 2053 676.6 330 2.4 1.7 708 4.2 4.2

1994-95 1914 2305 1204 2.4 1.8 750 4.3 4.3

1995-96 1902.9 1028.3 540 2.1 1.7 810 4.7 4.2

1996-97 1835 2449 1335 1.7 1.4 824 5.9 6.6

1997-98 1926.2 2615 1358 1.9 1.6 842 5 6

1998-99 1940.8 2577.8 1328 0.9 1.1 1222 4.9 5.8

1999-00 1826.5 777.5 393 0.7 0.5 714 - -

2000-01 1744.6 688.6 395 0.4 0.4 1000 5.3 6.3


Karnataka Kerala Madhya Pradesh



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1991-92 1015.3 751.2 688 13.5 9.5 704 241.7 170.2

1992-93 1045.2 826.7 791 14 10.4 743 233.8 247.2

1993-94 985.4 809.5 822 11.2 10.7 955 219.2 209.9

1994-95 960.5 661.6 689 16.5 12.8 7736 236.1 188.7

1995-96 1191.9 1138.7 955 14.3 9.9 692 220.1 228

1996-97 1100.3 916.6 833 14.3 9.9 692 222.8 223.2

1997-98 1040.4 706.6 679 11.3 8.6 761 221.8 223.8

1998-99 1230 1192.1 969 11.3 9.5 841 216.5 233.4

1999-00 1120.5 768.6 686 6.8 5.4 794 223.6 222.4

2000-01 1125.6 899 799 6.9 5.2 754 236.8 242.2

GROUNDNUT PRODUCTION IN GUJARAT STATE:

Summer GroundnutSr. No Name of District 2000-01 2001-02 2002-03


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Area Prod. Y/Hec. Area Prod. Y/Hec. Area Prod. Y/Hec.

1 Ahmedabad 1 2 1799 1 1 1191 1 2 1634

2 Banaskantha 4 8 1799 5 6 1191 2 3 1637

3 Vadodara 10 21 2010 31 39 1272 41 73 1797

4 Broach 13 23 1785 12 15 1191 10 14 1353

5 Valsad 3 5 1799 2 2 1191 1 2 1635

6 Dang 1 1 1799 1 1 1191 1 1 1635

7 Gandhinagar 4 7 1799 2 2 1191 1 1 1635

8 Kheda 5 10 1930 4 7 1715 3 6 2179

9 Mehsana 1 2 1799 1 2 1191 0 1 1650

10 Panchmahal 3 3 759 7 9 1340 8 12 1629

11 Sabarkantha 36 44 1222 26 30 1161 17 24 1399

12 Surat 62 88 1418 72 109 1504 77 129 1662

13 Amreli 2 2 970 5 8 1515 2 3 1115

14 Bhavnagar 1 1 1115 2 2 1021 233 344 1476

15 Jamnagar 1 1 1799 15 37 2518 2 3 1637

16 Junagadh 4 4 946 19 25 1297 8 11 1412

17 Kutchh 148 325 2196 154 237 1535 154 291 1890

18 Rajkot 1 1 1799 1 1 1191 1 1 1655

19 Surendranagar 26 38 1481 10 12 1191 6 11 1734

Gujarat State 326 586 1798 370 545 1471 568 932 1640

Total Groundnut

Sr. No Name of District

2000-01 2001-02 2002-03

Area Prod. Y/Hec. Area Prod. Y/Hec. Area Prod. Y/Hec.


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1 Ahmedabad 8 4 500 14 19 1357 22 13 553

2 Banaskantha 20 14 700 23 32 1391 25 14 288

3 Vadodara 31 29 935 54 71 1315 55 80 1472

4 Broach 22 26 1182 27 37 1370 15 17 1070

5 Valsad 7 6 857 8 10 1250 6 4 700

6 Dang 42 16 381 42 59 1405 40 21 528

7 Gandhinagar 7 8 1143 5 6 1200 10 6 564

8 Kheda 30 19 633 8 12 1500 8 8 1096

9 Mehsana 54 22 407 47 66 1404 42 22 515

10 Panchmahal 21 10 476 14 14 1000 18 17 982

11 Sabarkantha 321 237 738 359 320 891 366 293 801

12 Surat 177 166 938 203 259 1276 153 222 1443

13 Amreli 2478 423 171 2816 4090 1452 3132 2248 717

14 Bhavnagar 1458 132 90 1935 2636 1362 2289 2117 925

15 Jamnagar 3914 92 24 4106 5730 1396 4464 165 37

16 Junagadh 4067 4152 1021 4459 7196 1614 4586 4133 901

17 Kutchh 761 1087 1428 840 1017 1211 535 757 1414

18 Rajkot 3812 217 57 3683 4659 1265 4308 540 125

19 Surendranagar 218 222 1018 234 233 996 220 268 1216

Gujarat State 17448 6882 398 18877 26466 1402 20294 10945 539

Gujarat Produces Export quality kernels:

Groundnut is grown in two main seasons Summer & Winter. Quality of groundnut kernels of summer season is known as Java

Type. Quality of groundnut kernels of winter season is known as Bold Type.


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BOLDS:

Main producing belt is Keshod, Mangrol, Veraval and Porbandar, Junagadhdistrict covers approximate 85% of production of Bolds. Balance 15% is

produced is smaller belts in the rest of the state.

JAVAS:

Main producing belt is Kutch which covers approximate 55% of productions& Balance 45% is produced in Junagadh district. Kutch is giving larger sizekernels.

Count size is calculated on ounce basis. Count 35-40 means 35 to 40 Kernelsof groundnuts in one ounce.

1 ounce = 28.5 grams.

CONSUMPTION PATTRN OF GROUNDNUT:

Groundnut Production


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Consumption pattern of Groundnut in India Percentage (%)

Crushed for oil 81

Seed purpose 12

Directly Use for Food 6

Seed Feed Available for Crushing

Export H.P.SGroundnut

Trade in Seed

Expeller Ghani

Oil Oil Cake Wastage in form

of Shells

Repacker/Filteration

Refineries

Retailers

SolventExtraction

Oil Cake for homeconsumption

Oil

DomesticConsumption

Industry

DeoiledCake

Export HomeConsumption

Wastage

FamilyPacking

Drums(Loose)

CONSUMER


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Export 1

0

10

20

30

40

50

60

70

80

90

Percentage (%)

Crushed for oil

Seed purpose

Directly Use forFood

Export

Uses of Groundnuts:

Groundnut is constituents of many household preparations. Rural as well asurban populations use them. Some common preparations are Chutneys, Dry

powders, sweets and as an ingredient of fried rice and even Chapattis. Thecommon products are discussed below:

Peanut Flour:

Processing for large-scale peanut flour production consists of five steps viz.

moistening peanuts to 12% moisture, heating to 82.2 Celsius and holding for30 min at 82.2 C, 12% m.c. Drying at 82.2 C to 6% m.c. And flaking andremoving oil by direct solvent extraction. The product is white flour, blandand virtually free of raw peanut flavor with 65% protein.

Peanut Butter:

This is the processed edible product. There are three types: (a) old fashionedbutter.(b) Smooth butter and (c) chunky butter. Mostly varying in particle sizes of

the groundnut in butter. The manufacture of butter involves roasting of thekernel to a controlled brownness followed by cooling and removal of skins(blanching). Spoiled and discolored kernels are removed at this stage. Thengrind Kernels to a paste or butter according to the product desired. Salt,stabilizers and other optional ingredients like sweeteners are blended with

butter prior to cooling and packaging.


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Groundnut based yogurt:

Groundnut milk is prepared from groundnut protein isolate. The process of preparing groundnut yogurt involves pasteurization of groundnut milkcontaining 5% lactose, cooling inoculating with yogurt culture, incubating at37 C for 4 hours and refrigeration.

Chocolate flavored groundnut beverage:

Milk like beverage prepared from oilseeds has great potential as nutritionalsubstitute in areas where cow milk is too expensive or indigestible for some

people. An acceptable chocolate flavored groundnut beverage can beprepared by mixing 3.5% fat, 8% sugar, 0.7% cocoa powder, 0.1% stabilizerand remaining water.

Boiled nuts:

Unshelled immature nuts are boiled in medium brine and eaten fresh orfrozen and canned.

Roasted Groundnuts (in shell):

Mature nuts are shocked in brine followed by roasting.

Roasted groundnuts:

Whole or chopped kernels are roasted and used directly. Use of partly orfully defatted nuts is also getting popular now a days.

Peanut Candies:

More than 50 types of candies are made of groundnut, the most popularingredients in American candies.

Pre-cooked full fat peanut flakes:

Blanched cotyledons (without germs) are dried to 2% to 4% moisture andare then ground to a fine paste. Water is added while heating and the slurry


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is dried to get flakes. The flakes have high keeping quality. Flakes find usein formulated food of high fatted protein.

NON-EDIBLE USES:

Groundnut oil finds a limited use in manufacture of cosmetics, candles,leather dressing, furniture creams and as a tallow substitute. It is also usedto extract glycerin, which is about 9.8%. In medicine it is used as an olivesubstitute. It is reported to be useful as an aperients, emollient an in thetreatment of infantile paralysis. Groundnut oil contains an inflammatorycompound. I emulsion is used as an insecticide and also as suckericide in thecontrol of tobacco suckers.

Route of Groundnut from farmer to exporter.

The general pattern of marketing groundnut crop produce is a maze ofsituations where the transactions are conducted at the farm, village,regulated and unregulated market yards, brokers' offices, traders' offices, theoil expelling units, the decorticating units, etc. The entire chain of market

activity was covered under this study except the regulated market since thereare no groundnut-regulated markets in this area.

Groundnut is marketed as pods in shell or as kernels after decortication. Theexport consists of kernels only. The marketing for the rainy-season cropgenerally commences in October and is over in February. The peak period


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of marketing is in November-December when over 45% of the market-surplus of the groundnut arrives in the markets.The farmers take about 70-80% of the marketable surplus of groundnut pods

personally to the market. The sales in villages are invariably markets aspods while the sales in assembling markets are both as pods and kernels.The advantages of selling in the village are offset by the use of defectiveweights and measures.The sellers have to pay tolls, taxes, commission, labor wages, weight mencharges and deduction on charity at regulated markets. However, thegrowers can secure maximum value for their produce in the regulatedmarkets. The methods of sale generally adopted is auction system.

As far as concern with export, exporter contacts to Groundnut exportersbroker when they want to purchase. This brokers deal with HPS units. HPSunit owner purchases groundnut either from marketing yard or directly fromfarmers. Here the groundnut kernel is decorticated from shell and grading isdone count wise. Then kernel is packed in jute bags and labeled accordingto the exporters requirement.

Mkt. Yard


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The contract is executed between Groundnut exporters broker and HPSunit. Following terms and condition are pre-fixed in this contract.

1) Quality2) Count3) Moisture4) Price5) Quantity6) Delivery date and destination7) Payment term8) Packing requirement9) Brokerage

10) Aflatoxin

The role of broker is crucial because HPS unit doesnt deal directly with theexporter because of price sensitive market.

The Contract copy is shown in APPENDIX

Moisture is checked in HPS units with help of a handy instrument. WhileAflatoxin is checked by Geochem or SGS institutions at port.

The following traits are used to determine the export quality of

groundnut

TRAITS DESIRABLE ASPECTS

Size 60-70 counts for peanut butter, 45 counts for table purpose,30 counts for table purpose

Shape Round or elongated with tapering ends.

Color Tan, Rose Tan, Red.

Flavor(Roasted)

Almond, coffee, fresh, nutty, popcorn, smoky, and sweet.

Texture(Roasted)

Firm and crisp texture.

Biochemical &Nutritional

Law oil content, high protein content, high carbohydrate, high vitaminsB1, B2, E, high in minerals like Ca, Mg, Fe, Low in anti nutritionalcompounds like oxalic and phytic acid.

AflatoxinContamination

Free from aflatoxin lower limit 5 ppm and 30 ppm upper limit.


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EXPORT PROMOTING ORGANISATION i.e. organizations involved

in the promotion of groundnut seeds, oil and meal export

The two important Export promoting councils are:

1) SEA (SOLVENT EXTRACTION ASSOCIATION OF INDIA)

SEA of India was incorporated as a public limited company in 1971.

OBJECTIVES

To Promote and protect the trade, commerce, manufacturing andexporting, trading and other activities of the solvent extraction

industry. To encourage and promote the use of solvent extracted oil-bearing

materials and their by-product in India & abroad.

To represent and make known members point of view and theinterest of the solvent extraction industry.

To establish, promote, operated, maintain, increase, and encourage,steady and stable expansion of the export of deoiled cakes/meals.

2) TECHNOLOGY MISSION ON OIL PROMOTION (TMOP)

The Technology mission on oil seeds was established in May 1996 toachieve self reliance in oilseed production and save huge foreignexchange. The mission adopted following strategies.

Improvement of oil seeds crop technology for stepping up field& project to farmer.


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Improve processing & post harvest technology, which canincrease the oil from traditional and non-traditional sources of oil.

Straitening services to farmer, particularly to supply for easyaccess to seeds, fertilizer, irrigation credit, etc.

Improve institution for post harvest services including pricesupport to processing industry.

There are much other export promotion council such as theAgricultural and processed food Product Exports DevelopmentAuthority (APEDA), Apparel Promotion Council, Etc.

A BRIEFING OF THE EXPORT PROCESS

ELIGIBILITY CRITERIA FOR STARTING AN EXPORT/IMPORT

BUSINESS

Following are minimum requirements for starting an export/import

business:

A) Exports code no.

B) Import-Export (I.E.) code no.

C) A bank account

D) Trade license

E) Membership with a promotional Organization or chamberof commerce.

Earlier, Exporters code no. was to be obtained from the Export ControlDepartment of Regional offices of the Reserve Bank of India in Prescribedform (from CNX)However, THIS REQUIREMENT HAS BEENDISPENSED WITH FROM 1ST JANUARY 1997.

1) Import-Export (IE) code no. Is obtainable from the Regionaloffices of the Director of Foreign trade (DGFT) in prescribed form the

available with them. Prospective Export-Importer is required to furnishcertain particulars in compliances with various statutes of our country.Import-Export transaction affects the countries Balance of payment

position and cells for its proper accounting by the genuine trader andallotment of Export-import code no. is a smoke kind ofLICENCE/APPROVAL IN FAVOUR OF THE PROSPECTIVETRADER (Importer/Exporter) in this direction. Allotment of I.E. code


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number entitles the holder to undertake import-export transaction legallysubject to further relevant rules and regulations prevalent at the time ofsuch transaction. The customs authorities will not allow any person toimport from or export to outside India unless he holds a valid I.E. Code

Number.Howeveer, Following categories of importer-exporters areexempt from the requirement of I.E. code number.

Ministries/Departments of the Central or State Govt.

Persons importing or exporting goods for their personal use notconnected with trade or manufacturing or agriculture.

Persons importing goods from/to Nepal provide the CIF Valueof single consignment does not exceed Indian Rs 25000

Persons importing/exporting goods from/to Myanmar throughIndia-Myanmar Border areas provided the CIF Value of singleconsignment does not exceed Indian Rs 25000

2) Trade License:

Trade license is a right granted to a trader by the local authority likeCorporation, Municipality etc. to conduct business legally at a particular

place. Bank may refuse to open any account without such license. Thislicense, in fact, recognizes a trader about its genuine existence.

3) Bank Account:

Settlement of all trade transaction (both domestic and international) must berouted through bank. In the present day situation, no one can think of any

business without a Bank Account. Bank is the primary media for settlementof any transaction, which takes place between the two independent entities.Besides, bank Account is the primary source of certain importantinformation leading to issuance of I.E. Code Number by the DGFT.

4) Membership with a Promotional Organization or Chamber of

Commerce:


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The importance of membership with a promotional organization or chamberof commerce needs no further introduction. Such organization helps theirmembers in number ways starting from identification of market for a

particular commodity and ending with realization of sales proceeds. Theseorganizations also assist in sorting our disputes with overseas buyers andeducate members about various formalities in handling foreign trade. In fact,these organization act as a friend, philosopher and guide to their members.

NEGOTIATION

Executives of firms going into the international market place often lack therequired business negotiable skills. The ability to negotiate effectively isrequired for discussion with importers & agents where the firm is exporting

its products.

Negotiating with business partners located in other countries is moredifficult than local companies as the language & customs of the other partymay be quite different from those at home. These factors add to thecomplexities of the transaction.

Stages of Negotiation:-

The process of negotiation goes from a situation of contention to one ofconclusion. Contention means that each party starts from a different pointconcerning what he or she hopes to achieve through negotiations.Conclusion refers to finalized agreements between the two parties on whatthey will each undertake to reach a common goal.

Initial stage

When the exporter meets potential agents in the target market he or she willhave certain interests to pursue in the business dealings that will not

necessary coincide with those of the other party. He may want the agent towork for a minimum commission. Further he may wish to sign up otheragents in the same country to increase sales and may limit the agencyagreement for a short period to test the market. The potential agent on theother hand may demand a higher commission than is being offered. He maydemand exclusively within the country and may ask for a contract spanningseveral years.


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In such situations the exporter will need to know how to proceed in the talkto ensure that most of the firms interests are covered in the final agreement.

Intermediary Stage

The step following the contention stage is clarification andcomprehension. Here both the exporter and potential agent should clarifytheir views and see the viewpoint of the other party.The next step is that of credibility and confidence i.e. the potential agentmay appreciate the exporters for larger profits especially for reinvestment.The exporter must also have confidence that the agent will put maximumefforts into promoting the product so that a contract for a longer period can

be awarded.

Final stage

The final stage is conclusion or agreement between the two. The agreementsigned by the exporter & potential agents would incorporate at least some ofthe exporters primary concern and some of the agents main consideration.

Points to Remember: -

When conducting business negotiations certain points are to be kept in mindthat may be useful as the negotiations proceed:

1. Situation to avoid during the negotiations: controversy and criticism.2. Attitudes to develop during the talks : Communication, collaboration

and cooperation3. Goals to seek during the discussion: change or alternative, continuity,

coherence, creativity, compromise, concessions, commonality,consensus, commitments and compensation.

Planning negotiations

To achieve a favorable outcome from the negotiation, an exporter shoulddraw up a plan of acting beforehand, address a few key issues.

Market Research


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Knowing what buyer wants or needs requires advance research. Besidescustomers preference an exporter should assess competition from bothdomestic and foreign suppliers and be familiar with the process that theyquote. The distribution channel used for the product and promotional toolsand message required should be examined. Such information will be usefulwhen negotiation with buyer. The more that is known about the targetmarket and the buyer for the products concerned the better placed theexporter is to conduct the negotiations and match the offer to the buyersneeds.

Assess your strength and weakness

An exporter should carry out a realistic assessment of the quantities that can

be supplied and the schedule for supplying them. Every effort should bemade to match the export firms size financial situation, production capacity,technical expertise, and organization strength & export commitment withcompatible buyers.

Assess buyers Needs

In negotiations the exporter should first find out what the buyer really needs.If the subject of prices has been raised at the outset, the background to any

price objections should be determined in order to understand the buyersrequirements better.

PROCESSING OF AN EXPORT ORDER:

The immediate task of the exporter is to acknowledge the export order,which is different from its acceptance. Then he should [proceed to examinethe export order carefully.

Among the most important Act/publications which should be consulted byan exporter in connection with the processing of an export order, it executionand its fulfillment are the Customs Act 1962. Carriage of Act, 1973,Schedule of Charges of Goods in respect of the port of shipment, Handbookof Export Promotion, Import-Export Policy Volumes I and II, and handbookof Import Export Procedures.


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The main parties involved in processing are the exporter, foreign buyer thenegotiation bank, the shi-ping company, the insurance company, the ReserveBank of India, the Chief Controller of Imports & Exports, the collector ofCustoms, the Port Commissioner and the clearing and forwarding agents.

The various aspects relating to processing of an export order are discussedunder.

NATURE:

Export order is a document communicating decision of foreign buyer topurchase items from the exporter. It would clearly indicate the exportersproforma invoice/quotation numbers and its date including item, quantity,price, delivery date, shipping marks, insurances, payment terms, documentsrequired etc.

ACKNOWLEDGEMENT:

The exporter should write a simple letter to the overseas buyer thanking himfor the export order and stating that the confirmation of the same would besent soon.

SCRUTINY:

The export order should be scrutinized on the following aspects1) Item: The order has been required for the product for which the

quotation offer was sent and the exporter is still in a position to supplythe product.

2) Size and specifications: They should be same as per the offer.3) Pre-shipment inspection: This should be either by exporter or any

agency available.4) Payment Conditions are same as stipulated.5) Special packaging, labeling and making requirements if any should be

noted for compliance. Particular attention should be paid to thepacking for consumer and industrial requirements.

6) Shipment and delivery date is in confirmation with the exporters

productions plans.7) Documents required such as the important ones are Bill of Exchange,

Commercial Invoice, Bill of Lading, Certificate or Origin, PackingList and insurance Policy.

CONFIRMATION:


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If the exporter is satisfied on various aspects referred above, a formalconfirmation of the export order should be sent to the buyer.

CLARIFICATION:

If the exporter is completely satisfied with the terms of the export order thenhe can give his confirmation. Clarification should be sought from the buyer

before its confirmation.The exporter should make reservation of cargo space for airfreighting or seafreighting of the export consignment as per the delivery period commitmentsmade to the buyer.If the terms of contract are in order, a delivery containing the specificationand other details of the order is sent to the factory for the manufacture ordispatch of export cargo the part of shipment.

EXPORT FINANCING:

Financial assistance a extended by the banks to the exporters at the stagesnamely-Pre-shipment Stage &Post-shipment Stage

Pre-shipment Credit:

The purpose of the advance includes purchase of raw materials on the purchase of finished goods, their manufacturing, processing, packing,transporting, warehousing etc. for export. Amongst the pre-shipmentfinances, packing credit is the most essential. Packing credit may be taken aequivalent to cash credit in domestic business except that case creditfacility is sanctioned as a continuous facility whereas packing advance isdisbursed for a specific purpose o enable the exporter to meet specific exportobligation.

Advance Against Export Incentives:

Advances against export incentives are generally granted at post shipment

level. However in exceptional cases, when the value of material to beproduced for export happens to be more than the FOB (Free on Board) valueof the contract considering the export incentives available for the exportablecommodity the advances at pre-shipment level are sometimes granted formore than FOB value concessional rages of interest which is applicable to

packing credit advance i.e. 13% is also available for 90 days on suchadvance.


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Advance against duty drawback:

Export credit is also given at pre-shipment level for an amount in excess ofexport order, the excess representing the amount of duty drawbackrecoverable from appropriate authority.The system of refund of duty on import meant for purpose of re-export, asthey are, as otherwise is usually called a duty drawback.

Post-shipment Finance:

Post shipment finance means any advance granted to an exporter aftershipment of goods. The need for post-shipment finance arises becauseexporters who sell goods abroad have to wait for a long time before payment

is received from overseas buyers. The period of waiting depends upon theterms of payment. Based on different types of terms of payment, differentmethods of financing are being devised.Advance against Export bill sent on collection:

It may sometimes be possible to avail advance against export bills sent oncollection. In such cases the export bill will be sent by the bank oncollection basis and will not be purchase. This facility is however not very

popular.

Advance against goods sent on consignment basis:When the goods are exported on consignment basis at the risk of theexporter for sale and eventual remittance of sales proceeds to him by theconsignee/agent, bank may finance against such transaction subject to thecustomers enjoying specific limit to that effect.

Advance against undrawn balance:

In certain lines of export it is trade practice that bills are not drawn for thefull invoice value of the goods but to leave small p[art undrawn for paymentafter adjustment due to difference in rates, weight, quality etc to be

ascertained after approval and inspection of goods. Banks finance suchundrawn balance provided within 6 months from date of shipment of goodsthe exporter will surrender the balance proceeds of shipment.

DOCUMENTS UDED IN FOREIGN TRADE-EXPORT/IMPORTS


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1. Exchange control documents : GR/PP/COD/SPFTEX

2. Financial documents : Bill of Exchange/Draft

3. Commercial documents : Commercial Invoice, Consular Invoice,

Packing / Weight Lists etc.

4. Risk (marine) covering : Insurance Policy/Certificate.

Documents

5. Documents of Title of Goods/ : Bill of Lading/Airway

bill/Consignment

Transport document. Note/Parcel Post Receipt/Truck

Receipt/

Seaway Bill.

6. Miscellaneous document : Health Certificate/Phytosanitary

Certificate

Inspection certificate, Certificate as to

age ofVessel, Certificate of origin, etc.

Exchange Control Documents otherwise known as official documents: Forexports.Export Declaration Forms:Current Exchange Control Regulations require that all exporters mustdeclare value of goods proposed to be exported along with relevant detailsviz: name of buyer, country of destination, FOB value etc. together with anundertaking to the effect that proceeds will repatriated into India within DueDate or 6 months from date of shipment whichever is earlier, in theExchange Control Declaration forms like GR/PP/COD/SOFTEX. ReserveBank of India prepares Balance of Payment statistics on the strength ofthese. All these forms bear distinct serial numbers with a two-alphabet

prefix following by six digit numerals. These forms are required to beunutilized within a specific validity period.

GR FORM:

It is issued in duplicate. This form is used for exports to all countries otherthan by post. The exporter is required to get GR form passed by the customauthority before shipment. The custom authority retains original and returnsduplicate to the exporter for submission to his banker latest within 21 daysfrom the date of shipment along with other shipping documents.

PP FORM:


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This form is also issued in duplicate Exporter presents this form to hisbanker for certification before shipment. Bank certifies in conformity withguidelines contained in Para6c. 1 of Exchange Control Manual (1993 Revn)and returns both the copies to the exporter. Then the exporter sends goodsthrough the foreign postal Dept and submits relevant documents togetherwith duplicate PP form to his banker who earlier certified it in compliancewith Exchange control requirements.

VP/COD FORM:

This form is used for exports to any country by Parcel Post underarrangement to realize proceeds through Postal Channel on Value Payable

basis. Under this system, Postal Authorities will arrange realization of

payment on delivery of goods. Exporters of Games and Jewellery andprecious stones normally use these forms.

SOFTEX FORM:

This form is used for export of computer software in non-physical formi.e. through satellite. This form is issued in triplicate and required to be

passed by the Ministry of Commerce, Dept. of Electronics, Govt of India ortheir authorized agent instead of custom authority as usually happens in caseof other commodities.

FINANCIAL DOCUMENTS

Bill of Exchange/Draft

Bill of Exchange is drawn and prepared in satisfying the requirements as pre Sec.5 Indian negotiable instruments ACT 1881. Bill of Exchangeperforms the functions of(a) Means for collecting payment (b) Means for demanding payment (c)Means for extending credit (d) A promise/undertaking for payment and (e) A

receipt for payment.

COMMERCIAL DOUCMENTS

(A)Commercial invoice:


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It is a statement of Sales and Purchase. The primary contents of acommercial invoice are

a) Name of buyerb) Mode of dispatch/shipment of goods-by steamer/air/post.c) Description, rate, quantity, unit price of merchandised) Terms of Sales i.e. FOB, CFR OR CIF etc.e) Total valuef) Terms of Payment Advance Payment/ Delivery against

Payment or Acceptance /Payment under Letters Of Credit etc.g) Shipping marks etc.

(B)Consular Invoice:

The contents of such invoice are almost at par with Commercial Invoice.The basis difference with Commercial Invoice is that the consular invoicemust be authenticated/attested by the Consulate office of the buyerscountry. The primary propose of such invoice is the ensure the price quotedin the invoice must be matching with the prevailing price of the samecommodities in the International market.

(C)Packing/weight List:

As the name suggests, it is a detailed statement of packing/weight ofmerchandise.

(D) Risk covering Documents:

Goods in transit are exposed to various risks till it reaches to buyer. Suchrisks consequently results into loss to the buyer. To avoid such unwarrantedloss, goods in transit should be adequately covered with a General InsuranceCo. from the point of loading to the place of final destination.

(E) Document of Title of Goods:


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Normally, following types of transport documents are used which serve as atitle to goods, viz.

1. Bill of Lading

The bill of lading is a document issued by the shipping company or its agentacknowledging the receipt of goods mentioned in the bill for shipment on

board of vessel and undertaking to deliver the goods in the like order andcondition as received to the consignee, provided the freight and othercharges specified in the bill have been duly paid.

2. Mate receipt

It is issued by the chief of vessel after the cargo is waded and it contains the

name of ship, place of receipt, vessel and voyage number, port of loading,port of discharge, place of delivery, container no, description of goods, grossweight and other details. The receipt is of transferable nature and must be

presented in due course at the shipping cos office to be exchanged into billof lading.

3. Air Consignment Note/Airway Bill

Acknowledgement of goods issued by a particular Airway or theirAuthorized Agent.It is issued in terms of conditions of the contract of carriage of goods. It islegally not a title to goods as the delivery can be taken without the original.

4. Parcel Post Receipt

It is issued by the postal Authority acknowledging the parcel.

5. Railway/Lorry Receipt

It is issued by the Railway/Transport Company.

MISCELLANEOUS DOCUMETNS

(A) Health Certificate/ Phytosanitary certificate

This certificate is a must for sale/purchase of any edible commodities. Itis normally issued by e\the Health Dept. of the concernedState or authorized representative of buyer. Regulation of certain countriesdoes not permit unloading of such goods unless suppo0rted by Health or


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Phytosanitary certificate. However, this certificate is required for exportingplants also.

(B) Inspection Certificate

As the name suggests, such certificate is issued by the reputed InspectingAgencies like SGS, LLOYDS International etc. Which certifies about thequality and/or quantity and/or description of goods before it is put OnBoard the ship. Such certificate protects the buyer from being cheated bythe unscrupulous seller by supplying inferior quality of goods and/orsupplying different materials and/or from non-supplying of any goods at all.

(C) Certificate as to the AGE of Vessel

Lloyds institute or similar other institutions issue this certificate inter-alia

confirming the status of the shipping Co. and whether the carrying vesselcan withstand long Journey or not. Sometimes, some unscrupulous tradersship valuable materials in a very old ship with a view to cheat theconsignee by taking out the goods in the midway in connivance with theshipping company and its crew members before it is brought to mid-sea andscuttled to force it sunk.

(D) Certificate of Origin

This certificate is generally issued by the Chambers of Commerce in thesellers country in the prescribed form certifying that the goods are ofsupplier countrys origin. Similarly, GSP certificate of origin is a must forIndian exporters supplying goods to any EEC countries. This GSPcertificate is called combined certificate of Value and Origin

TERMS OF SALE-INCOTERM

TERMS OF SALES means terms and conditions pertaining to contract(Sale) for goods viz; FOB, C.F.R. and C.I.F.etc.these term in sale infect

details certain duties and responsibilities on the part of both buyer & seller.as the law of different countries vary, the international chamber ofcommerce (ICC),Paris has brought out a broachers (ICC Pub No.460)coding the various terms of Sales and detailing the rights and duties of

buyer and seller which is commonly known asINCOTERMS(International commercial Terms).The primary objectives ofthese incoterms is to explain how costs and risks should be divided between


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the parties in connection with the delivery of goods from the seller to buyer.These are as many as 13 incoterms listed by the international chamber ofcommerce which have since been revised in 1996 indicating the primaryduties of the seller/exporter and the buyer in respect of transportation ofgoods from the seller to the buyer.

1. EX-WORKS - seller makes the goods available at his (seller)premises. The cost and risks of carrying/transporting goods from thesellers premises to buyers premises will be on buyers account.

2. FCA Free carrier3. FAS Free Alongside ship4. FOB Free on Board.

The responsibility of the seller under these TERMS is to arrange delivery of

goods to the buyers designated carrier at the point of loading and risks ofcarrying from the sellers warehouse/premises will be borne by the sellerwhereas cost and risks of loading and/or carriage to distention will be left onthe buyer.

5. CFR Cost and Freight6. CIF Cost, Insurance & freight7. CPT Carriage Paid To8. CIP Carriage and insurance paid to. Under these contracts, the

seller bears cost of carriage and risks of loss but without incurringdamage to the goods or additional cost attributable to events aftershipment, which is assumed by the buyers.

9. DAF Delivered At Frontier.10. DFS Delivered Ex-ship.11. DEQ - Delivered Ex-Quay (named place of destination)

The seller, under these terms of sale contract assumes all risks and costsup to the place of delivery at the buyers end.Incoterms are rules of interpretations without the status of law. Nonetheless,

these are accepted in major art of the globe as international customs of trade.


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PROCESS OF APPROACHING A FOREIGN BUYER

India exporters and trade houses should approach the overseasimporters/animal feed producer giving their complete profile, detailinginformation on their firm like year of establishment, number of employees,turnover and references of firms they are already supplying.The products, quantities and protein/all contents of the Groundnut that theyare in a position to ship from India and time period required by them toactually do so. Also the time required for products to be delivered at the

ports, loaded on board a vessel and be ready for shipment should alsoinformed to them regularly with which they can effect shipment as well asthe total quantities than can be shipped each time.Samples of products when sent should be accompanied with a detailedanalysis report. The report should be from a laboratory whose competence

is recognized internationally. Samples of the consignment being shippedshould be dispatched immediately after loading of the consignment. This is

because the importer would like to check the quality of the consignment theyare actually getting.By its inherent mature the trade of groundnut is based on thrust. Purchaseare made at times on the basis of telephone calls and importers are wary oftaking risks with people not known to them and whose performance recordis not known to them. Apart from incidental purchases, importers deal onlywith firms on a long-term basis and do not change supplies easily.In a new relationship, Indian exporters should adhere to L/C (Letter ofCredit) as mode of payment. Delivery schedules are agreed to in advance

between the importer and exporter.

INFORMATION TO BE SUPPLIED TO POTENTIAL BUYER

On Company

Experience of the Company

Size of Company in terms of no. of employees

Turnover

References of importing firms.

On Product

Aflatoxin content

Quality specification.


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On Logistics

Time to deliver meal at port

Time to load the ship

On Supplies

The total quantity, which can be supplied.

Frequency with which the exports can be done.

EXPORT PRICES OF GROUND NUTS

The price are based on international commodity prices and tend to fluctuateon daily basis the international market is highly competitive and volatile.The export prices of groundnuts seeds are influenced by following factors.

World production of Ground nuts

Climatic conditions affecting the Groundnuts crop.

Demand Supply conditions in the world.

Prices of all oil extractions are pegged to Ground nuts price

COSTING OF GROUNDNUTS EXPORTS

As the deal is done with the importer the exporter approaches the localmarket to procure the Groundnuts. The costs, which are incurred in the

process, are

1. The cost of Groundnuts at the local market.

2. The cost of the freight/transport from local market to the port.Generally the local seller takes the responsibility to arrange fortransport the loads the Groundnuts. Thus, the transport charges are

borne by him but he transfers them to the exporter by including thecharges in the cost of Groundnuts.


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3. Charges at port which are paid by custom clearing agent of the tradehouse. These charges include

Port charges

Handling charges

Storage charges Documentation charges

4. Fright and insurance of groundnuts movement to the importer countryfrom the port. These charges are borne by importer.

5. The interest charges on the money paid for procurement of thegroundnuts at the local market for the numbers of days in which actualexports is realized.

Local market agent is paid on behalf of the supplier along with thiscommission, 95% of the full mouth on the realization of the purchase. The5% is retained back for provision of rejects. The financing is done by the

bank of the exporter at certain predefined interest rates. The exporter has toincur these interest rates.

The export price quotations are generally on FOB basis where the trade

house

Supplies the groundnuts on board the vessel named by thebuyer at the named port of the shipment.

Bears all cost and risks of the goods until such time as theyshall have effectively passed the ships rail.

Provides at his own expense the customary clearance document

in proof of the delivery of the good and the imports.

Reserves the necessary shipping space and gives due notice ofthe same to the trade house.


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Bears all costs & risk of the goods from the time when theyshall have effectively passed the ships rail and pays the price as

provided in the contract.

The exporting trade house bears the following costs and responsibilities:

1. Providing invoice and packing list2. Provides certificate of origin3. Loads goods on the carrier4. Provides and pays inland transport insurance cost5. Pays for demurrage6. Obtains export documents7. Delivery of goods to port8. Unloading of goods at port

9. Pays port dues

The importer, within the month of the export agreement notifies the exporterof the arrival date of its ship and the date by which the exports should makethe consignment available at the port.

After incurring all the costs, if the trading house makes some profit or verythin marginal profit, it goes ahead with the exports. The profit rates ininternational trade of agro products are very low.

For an exporter, the amount of profit is not as important as the total amountof export turnover since the Government provides incentives to the exporteron the basis of their turnover. These incentives are what the exporters arelooking for.

Similarly, the importers are basically interested in

Proper quality

Proper quality /price ratio

Deliveries made on time

LOSSES DURING THE TRANSACTIONS OF GROUND NUTS


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The groundnuts are transported from the local market to the port on rail ortruck. Usually, the groundnuts are taken by truck due to the not very largequantities transported.

1. Sweeping the loss in groundnuts from the point the surveyor.(Nominated by importer) measures the weight to the port. It consistsof Fly-Off loss groundnuts are light in weight hence some of it fliesoff while transaction.

2. Pilferage groundnuts fall down during transaction.

TRANSPORTATION OF GROUNDNUTS.

There are two levels of transport

1. Inland- Road2. Sea Shipping

The limitation of road transport

The road transport is very expensive. The freight carrying capacity of thetruck has been brought down to 9.5 MT from 12.5MT. this has increased theroad transport costs.

The limitation of sea transport

1. Delayed docking of ships for berthing and carting space.2. Traffic congestion at ports3. High port handling charges

4. Port labor problems5. Lack of mechanical handling6. Inadequate loading facilities7. High shipping charges.


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Aflatoxins in Groundnut:

Groundnut and its products are good substrates for the growth of AspergillusFlavus and consequently production of aflatoxin. Aflatoxin contamination isa serious quality problem in groundnut. High aflatoxin load in HPS gradekernels and deoiled cake has seriously jeopardized our export earnings.Thus, aflatoxins have become the subject of concern in agriculture, as wellas in animal and human health on a global scale.

Natural occurrence of Aflatoxins:

Groundnut and its products are good substrates for the growth of AspergillusFlavus will grow only when the moisture content of groundnut samplesexceeds 9%. The cake, rich in protein when processed under unhygienicconditions generally contains high levels of aflatoxin. Studies conducted atthe Central Food Technological Research Institute (CFTRI), Mysore,revealed that aflatoxin is also problem in groundnut oil. It was found thatunrefined oil samples had an appreciable amount of aflatoxin ranging from

0.06 to 0.26 ppm. While refined oil samples were devoid of suchcontamination. Studies carried out at the National Research Center forGroundnut Junagadh reveled those groundnut kernels immediately afterharvest and 3 days after windrow drying contained 0 to 49 ppb of aflatoxin.

Factor Responsible for Aflatoxin Production:


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The nature of the strain of the fungus substrate PH, temperature, relativehumidity, moisture content of the substrate and aeration have been found toinfluence the quality and quantity of aflatoxins produced. The optimumlimits for growth of Aspergillus Flavus and Aspergillus parasiticus are 82-85% relative humidity and 30-32 C. Fungal growth is optimum whenmoisture levels of the substrate range from 15 to 30%. The optimumconditions for aflatoxin production are between 25 C to and 30 C at 85%relative humidity. When the atmospheric relative humidity is near 70% theseed moisture content will equilibrate between 7 and 9%. This is a levelunfavorable for the growth of the A. Flavus group. Pre mature drying of

pods and shell damage and kernel splitting during growth may lead totoxicity at harvest. These conditions may result from termite and nematodedamage to the root tissue, root-rot or sem-rot caused by fungi. Mechanicaldamage to the pods during weeding and other intercultural operations,

drought and long exposure of groundnut pods after harvest to atmospherecongenial to the growth of fungus. During storage, presences of mites,which are capable of carrying the spores of A. Flavus, increase the chancesof infection.

Control of Aflatoxin:

In view of the known hepatoxic properties of aflatoxins their widespreadoccurrence during cultivation, harvest, drying, storage and transit ofgroundnut and loss of HPS export market. Immediate attention and effortsare needed towards achieving effective control measures. Three basicapproaches prevention, removal and detoxification seems to be promisingfor aflatoxin control.

Prevention of mold contamination is the best control measure for aflatoxinproblem in peanuts. Woodroof (1983) has suggested the following measuresto avoid contamination.

1. Control nematodes, weeds and insects with appropriate chemicals, ifnecessary.

2. Irrigate the crop regularly keep moisture level constant so as toprevent growth cracks.

3. Harvest when peanuts are neither immature nor over mature.4. Avoid damage to pods during digging use digger/shaker inverter.


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5. Dry rapidly to 20% moisture in the windrow, then combine and dryartificially to about 10% moisture. Under high humidity or rainyclimate combine immediately and transfer dried peanuts to artificialdrying system. The drying operation need to be continuous andwithout break.

6. Store immediately under conditions that will ensure no furthermoisture uptake by the peanuts.

7. Based on the results obtained at the National Research Center forGroundnut. The use of rock salts (2%), plant products like asafoetida(hing), 0.1% if pure and 2% if impure, turmeric powder (2%) andaqueous leaf extract of neem and mehndi has been suggested for

preventing aflatoxin contamination in groundnut.8. Aflatoxin production can be prevented immediately after aureofungin,

propionic acid (5%), sorbic acid (0.1%), chlorothalnil (0.15%), mild

phenolic like ferrulic acid and o-vanillin.

Harvesting the crop at a stage where a maximum number of pods haveattained full maturity, sorting or discarding the immature or underdeveloped

pods, minimum mechanical damage during harvesting, curing (windrowdrying) at ambient air and sunlight for 1-3 days to reduce moisture content to18-25% and subsequent drying with heated air (35 C, air flow 15 cu.m/min.)to reduce the moisture content to about 10% help to reduce losses duringstorage.


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CONCLUSTION:

PRODUCTION:

Groundnut originated in the southern Bolivia/north west Argentina regionin South America and is presently cultivated in 108 countries of the world.

Asia with 63.4% area produces 71.7% of world groundnut productionfollowed byAfrica with 31.3% area and 18.6% production, and

North-Central America with 3.7% area and 7.5% production.

Important groundnut producing countries are China, India, Indonesia,Myanmar, Thailand, and Vietnam in Asia;

Nigeria, Senegal, Sudan, Zaire, Chad, Uganda, Cote d'Ivory, Mali, BurkinaFaso, Guinea, Mozambique, and Cameroon in Africa;

Argentina and Brazil in South America and USA and Mexico in NorthAmerica

WORLD GROUNDNUT EXPORT:

Groundnuts, a staple food for many developing countries, deserve a closerlook as anexport commodity. Less than 6% of the world groundnut crop is


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traded internationally, with export sales averaging close to US$ 1 billiondollars per year. There is, therefore,scope for export growth in groundnuts.

Investing in groundnuts is a sustainable way to address the rising needs for both food and foreign exchange. Todays exporters face two majorchallenges: ensuring food safety by preventing and controlling mycotoxincontamination of products and adapting groundnut supplies to demand forvarieties best suited to specific end-uses.

Groundnuts are widely cultivated as staple food in tropical and sub-tropicaldeveloping countries, providing a valuable source of proteins, fats, energyand minerals. Most of the worlds groundnuts are produced and consumed indeveloping countries. Less than 6% of the world production is exported.

Most of the edible groundnuts are not cultivated for export purposes. Inother words, producers do not usually grow the groundnut varieties bestadapted to specific export market uses, such as the manufacture of roasted,salted or coated nuts, snacks, chocolate-based products, or peanut butter.

Major producers

China took advantage of market reforms, as well as increased use of high-yielding seed varieties and agricultural inputs (fertilizers, pesticides,insecticides, mechanization and irrigation), to recently overtake India as the

worlds largest groundnuts producer. In China, over 3.6 million hectaresare under groundnut cultivation and 6 million tons are produced yearly.India is the second largest producer, with surfaces under the crop exceeding8 million hectares and outputs averaging 5.6 million tons per year. TheUnited States, Nigeria, Argentina and Indonesia are the following largest

producers, with annual outputs varying between 1 and 1.5 million tons peryear.

Groundnut production in African countries fluctuated greatly, though itnever exceeded 8% of the world output over the last decade. Yields perhectare are low, because of a combination of factors: unreliable rains; mostlynon-irrigated cultures; small-scale, traditional farming with littlemechanization, outbursts of pests and diseases and use of low-yielding seedvarieties; and increased cultivation on marginal land. Political instability andthe frequently unsupportive oilseed policies have also played their role.


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Yields vary

Yields in producing countries vary significantly, depending on climate, soil,farming systems and seed varieties. The spectrum is wide: over 2 tons perhectare (t/ha) in the United States; 1.81.9 t/ha in China and Argentina;about one t/ha in Indonesia, Brazil, Thailand, Viet Nam, Mexico, SouthAfrica and Myanmar; and only 0.50.7 t/ha in the other African countriesand in India (the second largest producer).

Trade is concentrated

Both export and import trade in groundnuts is very concentrated.

Exporters

The seven largest net exporters of groundnuts supplied about 87% of theworld export trade in 1997/98: Argentina (245,000 tons); India (240,000

tons); United States (230,000 tons); China (185,000 tons), Viet Nam (98,000tons); South Africa (40,000 tons) and the Gambia (20,000 tons).

Importers

Similarly, the five largest net importers purchase about three-quarters ofcurrent world imports: European Union (42%); Indonesia (13%); Canada(8%); Singapore (5%); Malaysia and the Philippines (3% each).

The positioning of the largest net exporters has shifted considerably duringthe last six years. China, although it has become the largest producer, lostover half of its shares in the export market of hand-picked selectedgroundnuts, mainly because of the increase of the domestic consumption.India moved up to second place; Argentina and Viet Nam doubled theirshares, while exports from the United States decreased slightly, facingstrong competition from Argentina.

World export trade averaged 1.2 million tons of groundnuts, valued at overUS$ 948 million per year over the last five years, out of which nearly two-

thirds was provided by developing countries. About 80% of exportsconsisted of edible groundnut varieties, with the remaining 20% ofgroundnuts used for crushing.

International prices of edible groundnuts fluctuated widely over the lastdecade, influenced by both market fundamentals and seasonal factors.


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SUGGESTIONS:

1) The Groundnut production tons per hectare of various region is givenbellow.

United States 2 T/HAChina and Argentina 1.81.9 T/HAIndonesia, Brazil, Thailand, Viet Nam, Mexico, South Africa and Myanmar1 T/HAAfrican countries and in India (the second largest producer) 0.50.7 T/Ha

So India can increase its production of groundnut tons per hectare by

using advance technology in farming.

2) India is the second largest Producer of Groundnut. And India is exportingits major Groundnut to Indonesia. What we suggest that European marketshould be the target market to earn valuable foreign exchange. To do this wehave some problem of quality but that can be solved. The major problem isof aflatoxin. But this problem has solution while farming. Exporter suggestsfarmers to produce Groundnut in a particular manner with a contract of

purchasing.


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3) Yet government has not introduced Agro Economic Zone for groundnut.Junagadh and Kutch Districts is the major producer of Groundnut in Gujarat.So government should take some initiative to make this region AgroEconomic Zone to motivate the exporters.

Dealing of Agrocommodities in India for Export Purpose

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