Market Prospects for Groundnut in West Africa COMMON FUND ...

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1.0 Introduction
This study was commissioned by ICRISAT, with financial support from the
Common Fund for Commodities. The study was implemented in the United
States, Africa and in Europe from 16 June to 15 December 2003. It will be
presented to ICRISAT in Bamako at the annual project meeting for the CFCfunded
project, Development of sustainable groundnut seed systems in West Africa.
1.1 Groundnut and groundnut products in trade
Groundnut (also known as peanut) or Arachis hypogea is a domesticated
pulse, a leguminous oilseed rich in protein and related to wild Arachis species
indigenous to Brazil, Bolivia, Uruguay and northern Argentina. World trade in
groundnut began with industrial extraction of groundnut oil in Marseilles in
the mid-19th century (Purseglove 1968,1988).
Groundnut is traded in a number of forms and the major markets have
different patterns of consumption for each. Groundnut is designated by its
type or variety (used in this sense as a generic term descriptive of a physical
type, rather than a synonym for ‘cultivar’), and the size of the seeds, which
must pass through a set of screens calibrated by the number of nuts in an
ounce. Groundnut known as ‘40/50’ (the most common, medium-sized
groundnut on the world market) would consist of between 40 and 50 seeds
per ounce.
The three basic groundnut types are the Virginia (the largest variety, used
in the roasted snack industry), Runner (medium-sized, common in
confectionary and as peanut butter) and Spanish/Valencia (smallest, high in oil
content and also used in peanut candy, confectionary and as peanut butter).
The most basic form of groundnut traded is groundnut in-shell, which
accounts for the majority of transactions both within the producer countries
and internationally. Second in terms of volume of trade is shelled groundnut.
Groundnut products may be divided into edible groundnuts and oilseed
groundnuts. The former are also known as confectionary groundnuts or
arachide de bouche (ARB), and are traded whole for further processing while
the oilseed variety lends itself to extraction of edible oil. About two-thirds of
the world’s groundnut production goes toward oil production. The main
groundnut oil exporting countries in any given year are Senegal and Argentina.
India has recently re-entered the market in response to unusually high prices
in 2003, discussed further in Section 3.5.