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

In addition, a bilateral trade agreement was reached between the US and
Argentina in 1994, allocating to Argentina upto 78% of the US groundnut
tariff-rate quota over the following five years, from 26,341 MT in 1995 to
43,901 MT in 2000. A similar tariff-rate quota allocation was given under the
agreement for Argentine peanut paste and peanut butter, with an in-quota
amount of 3,650 MT during 1995, with an in-quota tariff rate identical to, and
fixed for reduction at the same level as that of Canada under NAFTA.
Until recently, Argentina, Mexico and Nicaragua accounted for over 90
percent of US groundnut imports (USDA/FAS 2000), with Argentina
providing 75 percent. In 2000, however, China has recently surpassed
Nicaragua to provide the third largest share of US groundnut imports, with a
trade volume of 4,900 MT during 2000.
This volume is foreseen to increase, as China – already a ‘Most Favored
Nation’ (MFN) under US trade concessions – is expected to negotiate for a
larger share of the US groundnut TRQ under bilateral trade agreements, and
in future meetings of the WTO.
Given the costs involved in ‘rent’ to maintain the US groundnut tariff
quota, there is some recent speculation that the groundnut TRQs have
outlived their usefulness, and that their elimination would only benefit
domestic consumers and would have little impact on producers.
4.4 South Africa
While not specifically mentioned in the terms of reference for this
assignment, the South African groundnut market is highly significant in
international terms, and it may prove useful to consider recent developments
in the task of building an increased presence for West African groundnut
producers in international trade.
In addition to its productivity and reliability as a source of high-quality
groundnut to serve international markets, domestic demand for groundnut in
South Africa rides consistently higher than supply. Because groundnut quality
standards for the domestic market are considerably less stringent than those
governing the export market (particularly to Europe), domestic demand
serves as a market buffer, absorbing stocks that are affected by lower levels of
aflatoxin.
Even during a normal year, groundnut is required to serve domestic
market demand, and is imported from southern African countries (notably
Zimbabwe and Malawi), and even from further afield. One European
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