GROUNDNUT MARKET VALUE CHAIN PROFILE. Department of Agriculture, Forestry and Fisheries

GROUNDNUT MARKET VALUE CHAIN PROFILE 213 Department of Agriculture, Forestry and Fisheries Directorate Marketing Private Bag X 15 Arcadia 7 Tel: 12 319 8455/6 Fax: 12 319 8131 Email: MogalaM@daff.gov.za 1

TABLE OF CONTENTS 1. DESCRIPTION OF THE INDUSTRY...3 1.1. Producing Areas...3 1.2. Production Trends...5 2. MARKET STRUCTURE...6 2.1. Domestic Market and Prices...6 2.2. Exports...8 2.3. Share Analysis... 2 2. 4. Imports... 23 2.5. Processing... 26 2.6 Market Value Chain... 29 3. Market Intelligence... 3 3.1 Tariffs... 3 3.2. Performance of the groundnut industry... 34 4. ACKNOWLEDGEMENTS... 39 2

R' 1. DESCRIPTION OF THE INDUSTRY Groundnuts contribute approximately 1.1% to the gross value of field crops and the average annual gross value of groundnuts for the previous ten years up to 21/11 season amounts to approximately R 373 8 million. Groundnuts can be consumed in an unprocessed state, but they also serve in the economy as raw materials for the manufacturing of various products. These include, but not limited to, the manufacturing of such products as peanuts, peanut butter, sweets and cooking oil. The production of groundnuts is highly affected by the costs of production inputs as well as the demand for groundnuts. The contribution of the groundnut industry to the gross value of agricultural production is summarized in Figure 1. Figure 1: Groundnut Gross Value of Agricultural products 8 7 6 5 4 3 2 1 Years Source: Statistics and Economic Analysis The gross value of groundnut production, as shown in Figure 1, was relatively higher during 22/3 season and this was followed by a slight increase in the gross value of groundnut production during 23/4 season. The contribution of the groundnut industry to the gross value of agricultural production was characterized by fluctuations throughout the period under analysis with some consistent increases between 26/7 and 28/9 seasons. The gross value of production has reached the highest level during 28/9 mainly as a result of relatively higher levels of production coupled with higher producer prices at the time. The contribution of the groundnut industry to the GVP declined slightly between 29/1 and 21/11 seasons and this was followed by a slight increase during 211/12 season. 1.1. Producing Areas Figure 2 below shows the contribution of each province to the total groundnuts production in South Africa. The figure clearly indicates that the groundnuts are produced mainly in three provinces, namely 3

the Free state (37%),Northern Cape (29%) and North West Province (28%).. Groundnuts are also produced in Limpopo, KwaZulu-Natal and Gauteng provinces although the production is lower in these provinces. Figure 2: Groundnuts Production by Province 211/12 North West 28% Northern Cape 29% Gauteng % Limpopo 6% Kwazulu-Natal % Free State 37% Source: Statistics and Economic Analysis Table 1: Groundnut production by provinces PROVINCE Production (tons) 26/7 Production (tons) 27/8 Production (tons) 28/9 Northern Cape Production (tons) 29/1 Production (tons) 21/11 Production (tons) 211/12 217 215 31 27 12 18 95 169 Free State 21 35 7 33 69 35 2 7 218 Kwazulu- 3 8 3 15 Natal Limpopo 2 2 5 81 6 75 3 52 3 5 335 North West 13 25 65 28 22 2 9 168 Gauteng 5 6 6 6 Source: Statistics and Economic Analysis Table 1 indicates that during the past three years Free State Province has been the major producer of groundnuts even though groundnut production in this province has experienced considerable fluctuations during this period. Northern Cape is the second largest producer of groundnuts after Free State. However North West Province increased its production significantly during 27/8 and surpassed Northern Cape s production volumes. Notably, groundnut production in all the major producing regions, except in Northern Cape, has undergone a drastic increase during 27/8 season, leading to a slight increase in South Africa s total groundnuts production. During 21/11 season groundnuts production from provinces such as Free State and North West increased while production 4

Tons remained low in Gauteng and Kwazulu Natal provinces for the past six seasons. The volumes of groundnut production declined slightly in some provinces during 211/12 season. 1.2. Production Trends Plantings and production of groundnuts from 21/2 to 211/12 production seasons were as depicted in Table 2 and Figure 3. Figure 3: Production vs Total Area planted 14 12 1 8 6 4 2 Total Area Planted Source: Statistics and Economic Analysis Years Production Table 2 and Figure 3 make it clear that production volumes for groundnuts were at moderate levels during the 22/23 marketing season and this was followed by a missive increase in groundnuts production volumes during 23/4 season. During the 24/5 season the production decreased following a decline in area planted for groundnuts and then increased slightly during the 25/6 season. Despite only slight decrease in the area planted to groundnuts during 21/11 season, the groundnuts production volumes declined significantly during that time indicating a slight decline in yields. The period under analysis closed with moderate production volumes in 211/12 season. Table 2: Groundnuts: Area planted and total production Year 22 /3 23 /4 24 /5 25 /6 26 /7 27 /8 28 /9 29 /1 21 /11 211 /12 Area 5 72 44 49 41 54.2 52 57 55 45 planted (1 ha) Total production (1 tons) 67 128 72 84 66 1.5 113 1 73 67 5

Tons Source: Statistics and Economic Analysis 3. MARKET STRUCTURE 2.1. Domestic Market and Prices Figure 4 indicates local production together with consumption of groundnut in South Africa. Generally the production and consumption of groundnut were fluctuating throughout the period under analysis. The figure indicates that the period under analysis opened with production of groundnuts being less than the consumption implying that there was shortage of groundnuts in 22/3 in South Africa. Consequently in 23/4 South Africa produced enough groundnut as indicated in the figure that production is more than the consumption. The figure further indicates that the production and consumption of groundnuts in 25/6 and 26/6 was more or less the same. The figure also indicates that between 27/8 and 211/12 production of groundnuts was more than the consumption of groundnuts. 14 12 1 8 6 4 2 Figure 4: Local Groundnut Production vs Consumption Years Source: Statistics and Economic Analysis Production Consumption The average producer prices for groundnuts from 22/3 to 211/12 season are as indicated in Figure 5 below. 6

Price (R/ton) 9 8 7 6 5 4 3 2 1 Figure 5: Groundnuts Producers Prices 22/ 3 23/ 4 24/ 5 25/ 6 26/ 7 27/ 8 28/ 9 29/ 1 21/ 11 211/ 12 Price (R/ton) 55 287 2464 2849 5514 6122 6361 466 5142 8292 Period (years) Source: Statistics and Economic Analysis Figure 5 indicates the producer prices for groundnuts from 23 to 212, it further shows that the price for groundnuts ranges from R2464.21 to R8291.22 per ton. Generally the figure indicates fluctuating trend of groundnut producer price. The period under analysis opened with moderate level of groundnut producers price. The figure further indicates that prices of groundnuts declined dramatically between 23/4 and 24/5. This was followed by gradual increase in groundnuts producer price between 25/6 and 28/9. The figure indicates that the groundnuts producer prices closed with higher prices (R8291.22/ton) Figure 6 indicates the utilization of groundnuts in South Africa from 23/4 to 212/13. The crop groundnut is utilized for peanut butter and direct market, for oil and oilcake and for seed in South Africa. The figure further indicates that groundnut is mainly used for peanut butter and direct market as compared to the use for oil &oilcake and seed.. Throughout the period under analysis groundnuts were sold as edible groundnuts. On average 2492 tons of groundnuts are sold for crushing into oil and oilcake in the domestic market while 3271 tons are directed to the animal feed and seed markets. 7

Export volume (Tons) Export Value (Rands) Volume (Tons) Figure 6: Local Utilization of Groundnuts 7 6 5 4 3 2 1 Source: Statistics and Economic Analysis Marketing Years Oil & Oilcake Peanut Butter and direct edible market Seed and Unshelled 2.2. Exports The volume and value of groundnuts exports from South Africa to the world are summarized in Figure 7 below. Figure 7: Volume and value of groundnuts exports 3 25 25 2 2 15 1 5 15 1 5 23 24 25 26 27 28 29 21 211 212 Period (Years) Quantity Value Source: Statistics & Economic Analysis and Quantec Easydata 8

Figure 7 indicates volume and value of groundnuts exports from 23 to 212. The figure indicates that throughout the period under analysis the quantity of groundnuts exports were consistent with the value of groundnuts exports. The period under review opened with higher volume of groundnuts exports. On average the 1561 tons were exported at the value of 139 million. The figure further indicates that the exports of groundnuts were fluctuating between 26 and 29. The figure indicates that the highest volume of groundnuts exports were recorded in 21 (24977 tons) and the lowest was recorded in 27 (8834 tons). South Africa imports its groundnuts from countries such as Mozambique, Malawi, United Republic of Tanzania and India as shown in Figure 8. Figure 8: Exporters of Groundnuts to South Africa in 212 India 19% Mozambique 29% United Republic of Tanzania 24% Malawi 28% Source: ITC Trade Map Figure 8 indicates exporters of groundnuts to republic of South Africa in 212. The figure indicates that Mozambique is the largest exporters of groundnuts into South African markets followed by Malawi, Tanzania and lastly India in 212. During the same year, Mozambique accounted for about 29% of the total groundnuts imported by South Africa followed by Malawi 28% and Tanzania with 24% each. 9

Exports Volumes (Tons) Figure 9: Volume of groundnuts exports to various regions 14 12 1 8 6 4 2 24 25 26 27 28 29 21 211 212 Africa 2643.27 1915.729 1358.475 17.288 1937.279 232.579 3975.855 8449.31 285.161 Americas 6 186 18.1 316.8 9 Asia 6536.151 921.961 728.214 4645.1 7496.656 4542 7523.6 4886.35 3939.9 Europe 6714.996 9276.92 3721.533 27.478 4663.74 4655.175 13297.91 7361.424 5514.188 Oceania 18 396.8 252 198 386.4 216 162 324 144 Period (Years) Africa Americas Asia Europe Oceania Source: Quantec Easy data Figure 9 indicates volume of groundnuts exports to various regions in the world. The figure indicates that South Africa exports mainly to Europe, Asia and Africa. The figure also indicates that volumes of groundnuts exports to America and Oceania are less than 4 tons of groundnuts per year. Figure 9 shows that groundnut exports from South Africa are destined for the markets in Europe, Asia, Africa, the Americas and Oceania. The groundnut exports from South Africa to Europe and Asia are more than those destined to neighboring countries of South Africa within the African continent which is not surprising as most countries in Africa are involved mostly in primary agricultural production than in processing. Generally, the volume of groundnuts exports to Europe started to decline from 23 until 27, followed by slight increases between 28 and 21. Exports to Asia fluctuated at moderate levels from the year 22 until some increases were experienced in 28. The period under review closed with larger volumes of groundnuts exports being destined to Europe followed by Asia. Figure 1 below indicates exports of groundnuts to European Union from 23 to 212. The exports of groundnuts to these regions were fluctuating throughout the period under analysis. The figure indicates that South Africa was exporting mainly to Netherlands, United Kingdom and Germany throughout the period under analysis while exports to Belgium and Finland remained minimal. The period under analysis closed with Netherlands accumulating large volume of groundnuts originating from South Africa. 1

Exports Volumes (Tons) 1 9 8 7 6 5 4 3 2 1 Source: Quantec Easy data Figure 1: Volume of Groundnut exports to the European Union 23 24 25 26 27 28 29 21 211 212 Belgium 7 38 54 36 13 98 97 Germany 1173 1931 331 163 822 134 344 1447 769 Finland 324 18 58 47 114 288 234 122 United Kingdom 181 943 2144 486 348 73 9 226 56 Netherlands 7766 3134 3513 1385 125 2513 3451 8749 5344 5159 Period (Years) Belgium Germany Finland United Kingdom Netherlands Figure 11 indicates exports of groundnuts to Eastern Asia from 23 to 212. The figure indicates that in eastern Asia, South Africa exports Mainly to Japan. The figure further indicates that exports of groundnuts to China and Taiwan Province of China were lower during period under analysis. However, as mentioned earlier, it is important to note the steep decline in groundnut exports to Eastern Asia that occurred between 25 and 27, which was followed by a huge increase in export volumes from South Africa to Japan in 28. The volume of groundnuts exports to Japan declined dramatically during the year 29. On the African continent South African groundnut exports are destined mainly to the SADC region. 11

Export Volume (Tons) Export Volume (Tons) Figure 11: Volume of groundnuts exports to Eastern Asia 1 9 8 7 6 5 4 3 2 1 23 24 25 26 27 28 29 21 211 212 China 18 Japan 8867 6536 922 712 468 7478 4434 648 476 393.9 Taiwan Province of China Source: Quantec Easy data Period (years) China Japan Taiwan Province of China Figure 12: Volume of groundnuts exports to the SADC region 3 25 2 15 1 5 23 24 25 26 27 28 29 21 211 212 Period (Years) Source: Quantec Easy data Angola Mozambique Zambia Zimbabwe Figure 12 indicates volumes of groundnuts exports to the SADC regions from 23 to 212 in the African continent. The figure indicates that South Africa exports groundnuts more greatly to Mozambique and Zimbabwe. The figure further indicates that exports of groundnuts to Zambia were very lower during the period under analysis. The figure shows that Angola is also a potential Market for 12

Export Value (Rands) South African groundnuts. The value of groundnuts exports from various provinces are depicted in Figure 13 below. Figure 13: Value of groundnuts exports by Provinces 35 3 25 2 15 1 5 23 24 25 26 27 28 29 21 211 212 Period (Years) Western Cape Northern Cape Free State Kwazulu-Natal North West Gauteng Source: Quantec Easy data Figure 13 indicates exports of groundnuts by province from 23 to 212. The figure indicates that Gauteng province is the greatest exporters of groundnuts produced in South Africa followed by Northern Cape and Kwazulu-Natal. The figure further indicates that exports from the largest producers (Free State) were very lower throughout the period under analysis and this mainly influenced by lack of necessary marketing infrastructure. The figure further indicates that the values of exports from different provinces were fluctuating throughout the period under analysis. The exports of groundnuts from Western Cape were minimal throughout the period under analysis. Figure 14 indicates value of groundnuts exports in Gauteng province from 23 to 212. The figure indicates that City of Tshwane is the major exporters of groundnuts as compared to other district. Generally exports of groundnuts from Gauteng province were highly volatile throughout the period under analysis. The figure also indicates that Ekurhuleni and West Rand were also accounting the greatest exports value of groundnuts from Gauteng province. The period under analysis closed with Ekurhuleni commanding the greatest share of exports value.. 13

Exports Value (Rands) 14 Figure 14: Value of groundnuts exports from Gauteng Province 12 1 8 6 4 2 23 24 25 26 27 28 29 21 211 212 Period (Years) West Rand District Municipality City of Johannesburg Metropolitan Municipality Ekurhuleni Metropolitan Municipality City of Tshwane Metropolitan Municipality Source: Quantec Easy data Figure 15 indicates value of groundnut exports from Northern Province during 23 to 212.The figure indicates that the total share of North West Province in exports value of Groundnuts composed of Bojanala, Central, Bophirima and Southern district Municipality.. The figure further indicates that Bojanala commands the greatest value of groundnut exports from this province. The period under review closes with Bophirima commanding the greatest value of groundnuts exports. 14

Export Value (Rands) Export Value (Rands) Figure 15: Value of groundnuts exports from North West Province 8 7 6 5 4 3 2 1 23 24 25 26 27 28 29 21 211 212 Period (Years) Source: Quantec Easy data Bojanala District municipality Bophirima District municipality Central District municipality Southern District municipality Values of groundnut exports from KwaZulu-Natal Province for the period 23 to 212 are shown in Figure 16 below. 8 7 6 5 4 3 2 1 Figure 16: Value of groundnuts exports from KwaZulu-Natal Province 23 24 25 26 27 28 29 21 211 212 Period (Years) UMgungundlovu District municipality ilembe District municipality Umzinyathi District municipality ethekwini Metropolitan Municipality Source: Quantec Easy data 15

Exports value (Rands) Figure 16 indicates value of groundnuts exports from Kwazulu-Natal during 23 to 212.The figure indicates that the value of groundnuts exports during the period of analysis was highly volatile.. The figure indicates that ethekwini commands the greatest value of groundnuts exports from the province followed by Umgungundlovu and Umzinyathi district. The period under review closes with ethekwini which commanded the larger value of groundnuts exports in KwaZulu-Natal Province. Figure 17: Value of groundnuts exports from Western Cape Province 6 5 4 3 2 1 23 24 25 26 27 28 29 21 211 212 City of Cape Town 218514 124 6492 23354 36891 149 25424 37161 55298 974 Cape Winelands 5173279 984 6213 2525 Period (Years) City of Cape Town Cape Winelands Source: Quantec Easy data Figure 17 indicates value of groundnuts exports from Western Cape during 23 to 212.The figure indicates that city of Cape Town commanded greater value of groundnuts export throughout the period under analysis. The figure further indicates that Cape Winelands exported only in 23, 21, 211 and 212. 16

Exports Value(Rands) Source: Quantec Easy data Figure 18: Value of groundnut exports from Mpumalanga 5 Province 45 4 35 3 25 2 15 1 5 23 24 25 26 27 28 29 21 211 212 Gert Sibande District municipality Nkangala District municipality 1258956 1184649 Ehlanzeni District municipality 4649298 24 Period (Years) Figure 18 indicates that Ehlanzeni and Nkangala are the only districts which export groundnuts during the period under analysis. Groundnut export from Ehlanzeni District was high in 23; it was followed by a dramatic decrease of export value in 24. The groundnut export values from Ehlanzeni then disappeared completely from 24 to 212. Nkangala District only exported groundnut in 23 and 211. It opened up with a moderate groundnut export value in the period under analysis and decreased exports to o% after 23 until it exported in 211 at a value R1184649. 17

Export Value (Rands) Figure 19: Value of groundnuts exports from Free State 14 12 1 8 6 4 2 P4D3: Lejweleputswa District municipality P4D5: Northern Free State District municipality 23 24 25 26 27 28 29 21 211 212 13115436 82699 916852 45969 27 5 Period (Years) Source: Quantec Easy data Figure 19 indicates value of groundnuts exports from Free State during 23 to 212.The figure indicates that generally Free State is not major exporters of groundnuts. Despite the facts that is the largest producer of groundnuts in South Africa. The figure indicates that exports of groundnuts in Free State are only from two districts: Lejweleputswa and Northern Free State. Lejweleputswa exported only in 21.The figure also indicate that Northern Free State is the major exporter of groundnuts from this province. 18

Exports Value (Rand) Export Value(Rands) 8 7 6 5 4 3 2 1 Figure 2: Value of groundunt exports from Eastern cape Province Source: Quantec Easy data 23 24 25 26 27 28 29 21 211 212 Period (Years) Nelson Mandela Metropolitan Municipality Figure 2 indicates that Nelson Mandela Metropolitan is the only exporter of groundnut from the Eastern Cape. It further indicates that it exported groundnut only in 23 at a value of R72. The groundnut exports decreased to % after 23. Since 24 to 212 there has not been any groundnut export from Eastern Cape. The period under analysis closed with % exports value of groundnut. 12 1 Figure 21: value of Groundnuts exports Northern Cape Province 8 6 4 2 23 24 25 26 27 28 29 21 211 212 Period (Years) P3D5: Frances Baard District municipality Source: Quantec Easy data 19

Figure 21 indicates value of groundnuts exports from Northern Cape during 23 to 212.The figure indicates that out of all districts in Northern Cape only one district is exporting groundnuts. The figure further indicates that Frances Baard district commanded greater value of groundnuts exports throughout the period under analysis. 2.3. Share Analysis Table 3: Share of Provincial groundnut exports to the total South African groundnuts exports (%) Year 23 24 25 26 27 28 29 21 211 212 Province Western 1.87...2.3..1.3.3.3 Cape Northern 11.74 7.6 8.3 8.82 11.76 11.61 14.21 22.79 31.55 32.44 Cape Free State..49.19..19.. 2.83..45 Kwazulu- 16.7 36.69 28.49 29.5 16.12. 8.9 1.75 11.25 4.16 Natal North West 33.48 2.95 22.76 23.44 32.58....1 4.23 Gauteng 32.73 34.23 4.25 38.22 39.33 63.6 77.69 63.59 56.52 58.68 Source: Calculated from Quantec Easy data Table 3 indicates share of groundnuts exports from 23 to 212 by different province across South Africa. The table indicates that Gauteng, Kwazulu-Natal and Northern Cape Province were dominant throughout the period under review mainly due to the availability of a necessary marketing infrastructure in this province. The figure further indicates that the share of groundnuts exports from other provinces remained minimal throughout the period under review. Northern Cape Province s share of groundnuts exports have been increasing since 23 until 212. During the year 23 Northern Cape s contribution to South Africa s total groundnuts exports was 11.74% and this has increased to 32.44% in 212. This scenario is not surprising since Northern Cape Province has recently emerged to be one of the biggest producers of groundnuts, having accounted for 29% of South Africa s total groundnuts production during 211/12 season. Table 4: Share of the district groundnut exports to the total Gauteng groundnut exports (%) Year 23 24 25 26 27 28 29 21 211 212 District West Rand 4.49 1.6 8.3 12.7 1.81 46.46 33.1 42.51 26.56 4.24 Ekurhuleni 9.51 1.1 8.58 18.3 14.96.7 36.92 35.65 44.73 62.45 City of 39.77 27.92 14.72 9.8 7.52.98.84.9.31.29 Johannesburg City of 46.22 6.92 68.67 6.55 66.71 52.49 29.23 21.75 28.4 33.1 Tshwane Source: Calculated from Quantec Easy data 2

Table 4 indicates share of different district on the groundnuts exports to the total Gauteng groundnuts exports. The table shows that out of 5 districts in Gauteng province four districts are contributing to the total exports of the province. The table indicates that City of Tshwane commanded the greatest share of Groundnuts exports between 23 and 28. The table further indicates that the Ekurhuleni district municipality has commanded the greatest of groundnuts exports between 29 and 211. During the year 212, Ekurhuleni commanded the greatest share of Gauteng s total groundnuts exports, 62.45% followed by City of Tshwane and West Rand whose contributions to Gauteng s groundnuts exports were 33.1% and 4.24% respectively. Table 5: Share of the district groundnut exports to the total KwaZulu-Natal groundnut exports (%) Year 23 24 25 26 27 28 29 21 211 212 Districts UMgungundlovu.42.99 1.23.. 26.77. 3.86.7. UMzinyathi.......... UThungulu.......... ILembe 2.38.8...99..... EThekwini 97.2 98.93 98.71 1 99. 73.23 1 96.14 99.97 1 Source: Calculated from Quantec Easy data Table 5 indicates share of different district on the groundnuts exports to the total Kwazulu-Natal groundnuts exports. The table shows that out of 11 districts in Kwazulu-Natal only five districts are contributing to the total exports of the province. The figure further indicates that Kwazulu-Natal province has exports originating mainly from ethekwini districts primarily due to the use of the Durban harbor as a viaduct of produce that are transported from the Randfontein grain market for export purposes. The table indicates that UMgungundlovu, UMzinyathi districts, ILembe and UThungulu were showing a very low flow of exports of groundnuts in the province. During the year 212, ethekwini district commanded the greatest share of Kwazulu-Natal total groundnuts exports, contributing 1% while other districts contributed.%. %. Table 6: Share of the district groundnut exports to the total North West groundnut exports (%) Year 23 24 25 26 27 28 29 21 211 212 Districts Bojanala 28.23 76.7 7.55 1 1 1.... Platinum Ngaka-Modiri 22.42......... Molema Ruth 2.67......... Mompati Kenneth Kaunda 28.68 23.93 29.45..... 1 1 Source: Calculated from Quantec Easy data Table 6 indicates that from the periods 23 to 212, groundnut exports in the North West Province were mainly originating from Bojanala-Platinum District and Kenneth Kaunda District. The table futher 21

indicates that Ngaka Modiri-Molema District and Ruth Mompati District contribution to the total groundnut exports was minimal throughout the period under review. During the year 212, Kenneth Kaunda District Municipality alone accounted for 1% of the total North West groundnuts exports, while exports from other districts diminished. There were no exports of groundnuts from North West Province during the years 29 and 21. Table 7: Share of the district groundnut exports to the total Free State groundnut exports (%) Year 23 24 25 26 27 28 29 21 211 212 Districts Northern Free. 1 1. 1... 1. State Lejweleputswa....... 1. 1 Source: Calculated from Quantec Easy data Table 7 indicates share of different district on the groundnuts exports to the total Free State Province groundnuts exports. The table shows that out of 5 districts in Free State only two districts are contributing to the total exports of the province. Table 7 indicates that in the Free State Province groundnuts exports are mainly from the Northern Free State District Municipality and that groundnuts exportation in the province are not consistent since there were no exports from 23. The Northern Free State District Municipality commanded the greatest share during the periods 24 25, and again in 27. Lejweleputswa district did not export any groundnuts for the period under analysis, except during the year 21 and 212 when the district accounted for 1% of Free State s total groundnuts exports. Table7 also indicates that there were no exports of groundnuts from the Free State Province in 28 and 29. During the year 212, Lejweleputswa district commanded the greatest share of Free State total groundnuts exports, 1% while Northern Free State District Municipality contributed.%. Table 8 below demonstrates contribution of various districts to the Northern Cape s total value of groundnut exports. The table shows that out of 5 districts in Free State only one district is contributing to the total exports of the province. The table shows that in the Northern Cape Province groundnuts exports are mainly from Frances Baard District. The province only started to export groundnuts from 23 until 212 through Frances Baard District which shows a maximum performance in terms of exports commanding 1% shares of the total Northern Cape groundnut exports. Table 8: Share of the district groundnut exports to the total Northern Cape groundnut exports (%) Year 23 24 25 26 27 28 29 21 211 212 Districts Frances Baard 1 1 1 1 1 1 1 1 1 1 Source: Calculated from Quantec Easydata 22

Imports Volume (Tons) Imports Value (Rands) Table 9: Share of the district groundnut exports to total Western Cape groundnut exports (%) Year 23 24 25 26 27 28 29 21 211 212 Districts City of Cape 4.5 1 1 1 1 1 1 29.2 89.9 3.71 Town Cape Winelands 95.95...... 7.97 1.1 96.29 Source: Calculated from Quantec Easydata Table 9 indicates contribution of different districts of groundnuts exports in Western Cape Province. The figure indicates groundnuts exports from the Western Cape Province were mainly through the City of Cape Town district due to the use of the Cape Town harbor as a bypass. Since from the year 24 to 29, the City of Cape Town has been doing well in terms of groundnuts exports, having been the only exporter of groundnuts in the province between 24 and 29. The Cape Winelands district contributed largely in 23 and 21 with 95.95% and 7.97% respectively. During the year 212, Cape Winelands district commanded the greatest share of Western Cape total groundnuts exports, 96.29% while the districts contributed 3.71%. 2. 4. Imports The quantities of groundnuts imported and import values from 23 to 212 pursue the pattern which is shown in Figure 22. 3 25 2 15 1 5 Figure 22: Value and volume of Groundnuts imported in South Africa 23 24 25 26 27 28 29 21 211 212 Period (Years) 16 14 12 1 8 6 4 2 Import Quantity (Ton) Import Value (Rand) Source: Statistics & Economic Analysis; Quantec Easydata 23

Imports Volume (Tons) On average South Africa imports approximately 11518 tons of groundnuts per annum to the value of about 35 million rands. Figure 23 indicates that groundnut imports fluctuated considerably from the year 23 until 212. This occurred as a result of fluctuations in production volumes which were caused by inconsistent weather conditions over the period. The highest quantities of groundnuts were imported during the years 23 while the lowest were imported in 21. South Africa imports groundnuts from the following regions: Europe, Asia, the Americas and Africa particularly from the SADC region. Figure 23 indicates that over the past ten years South Africa has been importing groundnuts consistently from Africa, the Americas, Asia and Europe. The major groundnuts import market for South Africa is Europe followed by Africa and the Americas. On average, South Africa imports about 6789 tons of groundnuts annually from Africa while imports from Americas and Asia are about 176 tons and 2961 tons per annum, respectively. 16 14 12 1 8 6 4 2 Figure 23: Volume of groundnuts imports from various regions 23 24 25 26 27 28 29 21 211 212 Period (Years) Africa Americas Asia Europe Source: Quantec Easy Data Figure 24 below indicates that South Africa imports groundnuts from the following regions: Malawi, Mozambique, Zimbabwe Tanzania and Zambia from the SADC region. The Figure indicates that over the past ten years South Africa has been importing groundnuts consistently from Malawi and Mozambique. The major groundnuts import market for South Africa is Europe followed by Malawi. The figure further indicates that groundnut imports from the SADC region were inconsistent over the period under review with the lowest import volumes originating from Zambia, Zimbabwe and Tanzania. 24

Imports Volume (Tons) Exports Volume (Tons) Source: Quantec Easy Data Figure 24: Volume of groundnuts imports from the SADC region 1 8 6 4 2 23 24 25 26 27 28 29 21 211 212 Malawi 3225.18 6837.76 153 316.95 3659 1367.74 653 674 5521.23 344.12 Mozambique 1954.42 134.72 34.35 49 8976.9 1188 833.3 952.43 3573.86 United Republic of Tanzania 7413.15 1993.3 114.58 48.3 2752.9 Zambia 94 436.42 14.69 369.54 184.112 Zimbabwe 3 15.44 1.2 6.72 57.8 864.8 31.9 Period (Years) Malawi Mozambique United Republic of Tanzania Zambia Zimbabwe Figure 25: Volume of groundnuts imports from Eastern Asia 6 5 4 3 2 1 Source: Quantec Easy Data 23 24 25 26 27 28 29 21 211 212 China 4934.8 1876.2 1697.1 1792.6 141.1 489.57 997.95 955.74 745.4 661.22 Hong Kong 2.24.24.192 Japan 36 18 18 17.95 35.871 17.919 18 Period (Years) China Hong Kong Japan In Eastern Asia, groundnut imports originate mainly from China with some fractional intermittent imports recorded from other eastern Asian countries such as Hong Kong and Japan. The figure indicates that volume of groundnut imports from China was the highest in 23 and thereafter declined rapidly until the year 212. The period under review closed with lower imports of groundnuts from Eastern Asia. 25

Imports Volume (Tons) Figure 26: Volume of groundnuts imports from South America 8 7 6 5 4 3 2 1 23 24 25 26 27 28 29 21 211 212 Argentina 2689.1 74.84 36.24 6717.5 186.2 368.29 153.7 143.84.3 Brazil 698.1 9 2763.2 1334.4 144.6 Period (Years) Argentina Brazil Source: Quantec Easy Data Figure 26 indicates that South Africa s groundnut imports originate mainly from Argentina and Brazil. The groundnuts imports from South America were very low from 22 until 25. The highest imports of groundnuts from South America were experienced in 26 from Argentina followed by a huge decline in 27. The volume of groundnuts imports from Brazil improved marginally between 26 and 27 seasons. The figure further indicates that the imports of groundnuts were diminishing between 28 and 212. South Africa imported lower volumes of groundnuts from South America during the year 21 when less than 1 tons of groundnuts were imported from both Argentina and Brazil. The figure further shows that there were very low imports of groundnuts from South America during closing the year (212). 2.5. Processing Groundnuts are a high value crop that can be marketed with little processing but are extremely versatile and can be used in a wide range of products. The oil made from them can be used for cooking and they can be used to make peanut butter. In South Africa processing facilities mainly belong to various companies that produce a wide range of products. These include companies that produce peanuts, sweets, peanut-butter and cooking oil just to mention few. Oil contains high amounts of energy and fat-soluble vitamins (A, D, E, and K) and essential fatty acids. The oil content of the kernels is between 45% and 55%. The peanuts are prepared for the oil extraction process by being shelled and cleaned. Oil production requires some type of press with which to extract the oil from the groundnuts and filtering equipment. The alternative uses of groundnuts are detailed in the following diagram (Figure 19) 26

As indicated in Figure 19, groundnuts can be used in various ways at different levels within the industry. They can be boiled or roasted for immediate consumption or used as raw material of various products in the industry. Oil extracted from the groundnut can be used as raw material for manufacturing of soap; massage oil for polio patients; body, shaving and hair creams; and fluid diet which is used to physically strengthen patients and to sharpen their appetites before and after operations. The oil cake which is by-product of oil extraction process is used to make glue for wood; animal feed; fertilizers and antibiotics. 27

Figure 27: Groundnut Value Chain tree explaining its uses Ice Cream Products Spread on Bread Biscuits Fertilizers Peanut - Butter Peanuts Shells Groundnut Boiled and Salted Oil Cake Oil extraction Massage oil (For polio patients) Animal feed Groundnut Oil Cooking oil Fertilizers Antibiotics Body, shave and hair creams Fluid diet (For Patients) Glue for Wood Soap Petrol/Diesel Source: Grain SA and African Groundnut Council 28

2.6 Market Value Chain Figure 28: Market value chain for groundnuts Research and Biotechnology Input suppliers Farmers/Producers Silo Owners Traders and Transport Import and Export Market Oil industry Local Market Other Processors Peanut-making Industry Retail/Wholesale Consumer Farmers produce groundnuts and, after harvesting and drying, they grade the groundnut pods at a prescribed moisture level in the kernels. After grading, the pods are packed in gunny bags. The packed groundnuts are then sold to either the local market (processors) or foreign market, or they may be stored for on-farm processing and future sales. The processed groundnut products are sold in an acceptable form to the consumers. 29

3. Market Intelligence 3.1 Tariffs The following Table 1 indicates the tariffs that are applied by South Africa to the imports of groundnuts from other countries during the year 212: Table 1 Exporter Selected product codes Product description Mozambique 122 Ground-nuts, not roasted 122 Ground-nuts, not roasted Trade regime description Preferential tariff for SADC countries Applied tariffs Total ad valorem equivalent tariff (estimated).%.%.%.% Malawi 122 Ground-nuts, not roasted 122 Ground-nuts, not roasted.%.%.%.% Tanzania r 12211 Ground-nuts, not roasted or otherwise cooked, in shell, used as materials for oil extraction under the supervision of the Customs 122199 Ground-nuts, not roasted or otherwise cooked, in shell, excluding those used as materials for oil extraction under the supervision of the Customs, n.e.s. India 1221 Ground-nuts, not roasted or otherwise cooked, in shell 1221 Ground-nuts, not roasted or otherwise cooked, in shell China 12211 Groundnuts in shell for sowing 12219 Groundnuts in shell (excl. roasted or otherwise cooked and for sowing) (Applied.%.%.%.% 1.% 1.% 1.% 1.% 1.% 1.% 1.% 1.% 3

Exporter Selected product codes Product description 1222 Shelled groundnuts, whether or not broken (excl. roasted or otherwise cooked) 12211 Ground-nuts, not roasted or otherwise cooked, whether or not shelled or broken: In shell For feed purpose Madagascar 1221 Ground-nuts, not roasted or otherwise cooked, in shell Area Nes 1221 Ground-nuts, not roasted or otherwise cooked, in shell Zambia 1221 Ground-nuts, not roasted or otherwise cooked, in shell Source: ITC Market Access Map Trade regime description Preferential tariff for SADC countries Applied tariffs Total ad valorem equivalent tariff (estimated) 1.% 1.%.%.%.%.%.%.% Imports of groundnuts from SADC countries can enter South Africa free of duty due to the benefit of the SADC Free Trade Agreement while groundnuts imports from other countries outside the SADC region, such as China, and India, are restricted by an import duty of 1%. The following Table 11 indicates the tariffs that are applied by various countries to the exports of groundnuts originating from South Africa in 212: Table 11 Importers Selected product codes Product description Netherlands 122 Ground-nuts, not roasted Japan 122 Ground-nuts, not roasted Norway 122 Ground-nuts, not roasted Mozambique 122 Ground-nuts, not roasted Trade regime description Preferential tariff for SADC countries Applied tariffs Total ad valorem equivalent tariff (estimated).%.%.%.% 9.6% 9.6%.%.% 31

Importers Selected product codes Product description New Zealand 12211 Ground-nuts, not roasted or otherwise cooked, in shell, used as materials for oil extraction under the supervision of the Customs 122199 Ground-nuts, not roasted or otherwise cooked, in shell, excluding those used as materials for oil extraction under the supervision of the Customs, n.e.s. Finland 1221 Ground-nuts, not roasted or otherwise cooked, in shell 1221 Ground-nuts, not roasted or otherwise cooked, in shell Georgia 12211 Groundnuts in shell for sowing 12219 Groundnuts in shell (excl. roasted or otherwise cooked and for sowing) 1222 Shelled groundnuts, whether or not broken (excl. roasted or otherwise cooked) USA 12211 Ground-nuts, not roasted or otherwise cooked, whether or not shelled or broken: In shell Trade regime description Applied tariffs Total ad valorem equivalent tariff (estimated).%.%.%.%.%.% (Applied.%.%.%.%.%.%.%.% 68.4% 68.4% 32

Importers Selected product codes Product description For feed purpose 12211 Ground-nuts, not roasted or otherwise cooked, whether or not shelled or broken: In shell For feed purpose Trinidad and Tobago 1221 Groundnuts in shell, not roasted or otherwise cooked 1222 Shelled groundnuts, whether or not broken (excl. roasted or otherwise cooked) Egypt 12211 Groundnuts in shell for sowing Source: ITC Market Access Map 12219 Groundnuts in shell (excl. roasted or otherwise cooked and for sowing) 1222 Shelled groundnuts, whether or not broken (excl. roasted or otherwise cooked) Trade regime description Applied tariffs Total ad valorem equivalent tariff (estimated) 68.4% 68.4% General tariff 22.5% 22.5% General tariff 22.5% 22.5% 5.% 5.% 5.% 5.% 5.% 5.% Table 11 above shows that South Africa does not face any tariff barriers when exporting groundnuts to countries such as Finland, Japan, Netherlands, Mozambique and Georgia. This is mainly due to the fact that some of these countries do not charge any tariffs on imports of groundnuts originating from other countries. South Africa enjoys a preferential tariff of % ad valorem when exporting groundnuts to Mozambique due to the existence of SADC Free Trade Agreement. Norway, United State of America and Trinidad and Tobago groundnuts industries are heavily protected by higher tariffs that are charged by these countries. Japan applies 63.79% Ad Valorem on imports of groundnuts originating from other countries while Norway applies tariffs ranging between % and 55. on imports of groundnuts originating from South Africa. There is a preferential tariff of 36.28% in Norway on groundnuts imports originating from SACU countries. 33

3.2. Performance of the groundnut industry Figure 29 Source: ITC Trade Map 34

Figure 29 and Table 13 indicate that imports of groundnuts from Tanzania to South Africa increased significantly between the years 28 and 212. Groundnuts imports from Tanzania increased by about 23% in value between the years 28 and 212 while exports of the same product from China to the world increased by 52%. Groundnuts imports from india increased by 171% in value while those from Malawi and Mozambique increased by 62% and 37% respectively. Table 12: List of supplying markets for the groundnut imported by South Africa in 212 Exporters Imported Share in Imported Unit value Imported Imported Imported value in South quantity (US$/unit) growth in growth in growth in 212 Africa s (tons) value quantity value (thousand imports between between between US$) (%) 28 and 28 and 211 and 212 (% 212 (% 212 (% p.a.) p.a.) p.a.) World 1832 1 13568 1 349 52 39 8 Mozambique 4466 24.4 3574 1 25 37 32 387 Malawi 4217 23 344 1 239 62 49-35 Tanzania 362 19.8 2752 1315 23 121 533 India 2855 15.6 1994 1432 171 97 224 China 143 7.8 661 2163 17 3 1 Madagascar 769 4.2 571 1 347 - Area Nes 282 1.5 178 1 584 - - Zambia 254 1.4 184 138- - - Source: ITC Trade Map Table 12 and Figure 3 show that Mozambique is the biggest supplier of groundnuts imported by South Africa in 212. It is clear from the figure and the table that Mozambique accounted for about 24.4% of the total groundnuts imported by South Africa during the year 212. The other major exporters of groundnuts to South Africa are Malawi and Tanzania which account for 23% and 19.8% of South Africa s total groundnuts imports respectively. It is also notable that South Africa is reflected as one of the major suppliers of groundnuts to itself and this is a reflection of re-importation of groundnuts by South Africa. 35

Figure 3 Source: ITC Trade Map 36

Table 13: List of Importing markets for the groundnut exported by South Africa in 212 Importers Exported Share Exported Unit Exported Exported Exported value in in quantity value growth growth growth 212 South 212 (US$/ton) in value in in value (thousand US$) Africa s exports (%) (tons) between 28 and 212 (% p.a.) quantity between 28 and 212 (% between 211 and 212 (% p.a.) p.a.) World 22316 1 19 2212 6-5 -13 Netherlands 1915 48.9 5177 218 38 21 19 Japan 9,34 41.9 394 2392-12 1 Norway 565 2.5 233 2425-4 -15-4 Mozambique 448 2 339 1322-8 -19-61 New Zealand 366 1.6 144 2542 3-9 -54 Finland 281 1.3 122 2 33-6 -18-5 Georgia 114.5 36 3167 - USA 15.5 54 1 944-6 Trinidad and.3 36 2139-9 77 Tobago Egypt 71.3 25 2 84-13 Source: ITC Trade Map It is clear from Table 13 and Figure 31 that the major export destinations for ground-nut originating from South Africa are Netherlands, Japan Norway, Mozambique, New Zealand, Finland, Georgia USA Trinidad and Tobago, and Egyptwith the greatest volumes being exported to Japan and Netherlands. In 211, Netherlands alone absorbed 48.9% of South Africa s total groundnut exports followed Japan and Norway with 41.9% and 2.5% respectively. South Africa s value of groundnuts exports to the world increased by 6% in value terms between the years 28 and 212. The figure and the table further show that, between the years 211-212 the value of the South African groundnut exports to the world declined by 13% while those towards Egypt increased by 13% over the same period. Figure 31 further shows that South Africa s groundnuts exports to countries such as Netherlands, Japan, United Kingdom, USA, Norway and Mozambique have grown faster than these countries imports from the rest of the world. The growth rate of South Africa s groundnut exports to countries such as New Zealand and Mauritius is less than the growth in these countries imports from the rest of the world. The figure further shows that if South Africa wishes to expand its ground-nut export base, the prospective markets exist in countries such as Canada, Germany and Indonesia. 37

Figure 31: Prospects for market diversification for Groundnuts (1221) exported by South Africa in 211 Source: ITC Trade Map Source: ITC Trade Map 38

4. ACKNOWLEDGEMENTS The following organizations are acknowledged: Statistics and Economic Analysis: Department of Agriculture, Forestry and Fisheries Tel: (12) 319 8453 Fax: (12) 319 831 www.daff.gov.za Grain South Africa www.grainsa.co.za African Groundnut Council www.afgroundnutcouncil.org Quantec Easydata P.O.Box 35466 Menlo Park Pretoria 12 Tel: 12 361 5154 Fax: 12 348 5874 Website: www.quantec.co.za ITC Trade Map Website: http://www.trademap.org ITC Market Access Map www.macmap.org Disclaimer: This document and its contents have been compiled by the Department of Agriculture, Forestry and Fisheries for the purpose of detailing the groundnut industry. Anyone who uses the information as contained in this document does so at his/her own risk. The views expressed in this document are those of the Department with regard to the industry, unless otherwise stated. The Department therefore accepts no liability that can be incurred resulting from the use of this information. 39