GRAND PROJECT REPORT ON

DEALING OF AGROCOMMODITIES IN INDIA FOR EXPORT PURPOSE

SUBMITTED TO: PROF: S.C. REDDY

SUBMITTED BY: MAHESH VALA (85) KETAN SATODIYA (74) HEMANT MAKWANA (34)

S. K. PATEL INSTITUTE OF MANAGEMENT AND COMPUTER STUDIES GANDHINAGAR

Introduction: Indian agriculture provides a unique perspective of economic development that has overcome the problems of food scarcity and has yet not been able to exploit 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 and large, the country has a congenial climate and yet the agrarian sector is vulnerable to vagaries of the monsoon. The Marketing infrastructure is underdeveloped and there exists a complex vortex of interventions in the prices and distribution of commodities. Groundnut a premier oil seed crop in India. Groundnut is widely cultivated as staple food in tropical and subtropical developing countries providing a valuable source of proteins, fats, energy, and minerals. Most of the worlds groundnut is produced and consumed in developing countries. Groundnuts hold 33% share of total oil seeds. About 48% of the world output is for food uses 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 the period 1996 to 2000, China produced almost 40% of the world crop, and India 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 the worlds edible oil production. Peanuts are also called goobers, goober peas, pindars, groundnuts, earthnuts, monkey nuts, and grass nuts. Peanuts contain about 28% protein, 50% oil and 18% carbohydrates.

TYPES OF GROUNDNUT KERNELS: There are two main types of groundnut kernels. 1) Bolds 2) Javas Area of Production: Groundnut is produced in various states in India. The state wise production of Groundnut in various states of India from 1992 2001 is given in
Major States by Area States India Gujarat Andhrapradesh Karnataka Tamilnadu Maharashtra Rajasthan Madhyapradesh Uttarpradesh Orissa Chhattisgarh 1992-93 1993-94 1994-95 1995-96 1996-97 1997-98 1998-99 1999-00 2000-01 8166.4 8321.7 7848.6 7524 7596.4 7088.2 7396 6867.3 6733.4 1884 2053 1914 1902.9 1835 1926.2 1940.8 1826.5 1744.6 2372.4 2351.8 2176 2220.2 2203 1834.4 1992 1795.1 1865.3 1045.2 985.4 960.5 1191.9 110.3 1040.4 1230 1120.5 1125.6 1188.4 1158.3 1079.9 933.4 901.5 270.8 858.1 759.3 825.1 652.2 652.2 602.6 511 575.7 532.4 520.7 540 457.7 240.4 286.4 249.9 216.2 245.3 328.9 331.9 274.7 195.2 233.8 219.2 236.1 220.1 222.8 221.8 216.5 223.6 236.8 116 134.4 135.8 129.3 140.2 135 127.2 113.7 117.7 112.1 100.1 87.3 91.1 96.6 84.5 83.4 79.4 72.4 21.7 43.9 30 31.1 39.5 32.5 34.1 35 31

Major States by Production States India Tamilnadu Andhrapradesh Karnataka Gujarat Maharashtra Rajasthan Madhyapradesh Uttarpradesh Orissa West Bengal 1992-93 1993-94 1994-95 1995-96 1996-97 1997-98 1998-99 1999-00 2000-01 8560 7830 8061.6 7579.4 8642.9 7370 8981.6 5258.1 6222.8 1766.3 1865.6 1762.4 1520.3 1438.3 867.6 1569.8 1318.2 1456.7 1964.8 2545.6 1670.7 2625.7 2045 1155.9 2155 1089.2 2034.8 826.7 809.5 661.6 1138.7 916.6 706.6 1192.1 768.6 899 2068.4 676.6 2305 1028.3 2449 2615.9 2577.8 717.5 688.6 755.1 761 629.2 576.4 755.9 565.8 633.6 572 457.5 268.2 208.6 197.5 164.8 272.9 368.9 362 265.2 180.3 247.2 209.9 188.7 228 223.2 223.8 233.4 222.4 242.2 106.8 114.7 95.4 94.9 132.1 120 82 94.4 96.6 108.2 114 98.2 92.3 78.8 91.4 71.8 72.6 57.5 23 21.1 26.3 42.1 26.4 38.7 35 45.8 53.4

Groundnut Statewise Details 1991-2001

1991-92 1992-93 1993-94 1994-95 1995-96 1996-97 1997-98 1998-99 1999-00 2000-01

Andhra Pradesh Area Production Yield Area ('000ha) ('000 tns) (kg/ha) ('000ha) 2481 2151.8 867 0.3 2372.4 1964.8 828 0.3 2351.8 2545.6 1082 0.5 2176 1670.7 768 0.9 2220.2 2625.7 1183 0.4 2203 2045 928 0.2 1834.4 1155.9 630 0.3 1992 2155 1082 0.3 1795.1 1089.2 607 1865.3 2034.8 1091 -

Bihar Chhattisgarh Production Yield Area Production Yield ('000 tns) (kg/ha) ('000ha) ('000 tns) (kg/ha) 0.2 774 37.7 34.5 915 0.2 717 21.7 25.9 1194 0.5 990 43.9 39.2 893 0.9 1016 30 25.6 853 0.4 923 31.1 31.4 1010 0.3 1287 39.5 37.5 949 0.3 1011 32.5 39.8 917 0.3 1119 34.1 34 997 35 31 29 936

Groundnut Statewise Details 1991-2001 Gujarat Production Yield Area ('000 tns) (kg/ha) ('000ha) 699.7 360 2.3 2068.4 1098 1.9 676.6 330 2.4 2305 1204 2.4 1028.3 540 2.1 2449 1335 1.7 2615 1358 1.9 2577.8 1328 0.9 777.5 393 0.7 688.6 395 0.4 Haryana Jharkhand Production Yield Area Production Yield ('000 tns) (kg/ha) ('000ha) ('000 tns) (kg/ha) 1.7 739 4.8 3.7 772 1.3 684 3.6 2.8 786 1.7 708 4.2 4.2 988 1.8 750 4.3 4.3 1013 1.7 810 4.7 4.2 907 1.4 824 5.9 6.6 1123 1.6 842 5 6 1203 1.1 1222 4.9 5.8 1197 0.5 714 0.4 1000 5.3 6.3 1189

1991-92 1992-93 1993-94 1994-95 1995-96 1996-97 1997-98 1998-99 1999-00 2000-01

Area ('000ha) 1941.9 1884 2053 1914 1902.9 1835 1926.2 1940.8 1826.5 1744.6

Groundnut Statewise Details 1991-2001 Karnataka Production Kerala Production Madhya Pradesh Area Production

Area

Yield

Area

Yield

Yield

1991-92 1992-93 1993-94 1994-95 1995-96 1996-97 1997-98 1998-99 1999-00 2000-01

('000ha) 1015.3 1045.2 985.4 960.5 1191.9 1100.3 1040.4 1230 1120.5 1125.6

('000 tns) (kg/ha) ('000ha) 751.2 688 13.5 826.7 791 14 809.5 822 11.2 661.6 689 16.5 1138.7 955 14.3 916.6 833 14.3 706.6 679 11.3 1192.1 969 11.3 768.6 686 6.8 899 799 6.9

('000 tns) (kg/ha) ('000ha) 9.5 704 241.7 10.4 743 233.8 10.7 955 219.2 12.8 7736 236.1 9.9 692 220.1 9.9 692 222.8 8.6 761 221.8 9.5 841 216.5 5.4 794 223.6 5.2 754 236.8

('000 tns) (kg/ha) 170.2 704 247.2 1057 209.9 958 188.7 799 228 1036 223.2 1002 223.8 1009 233.4 1078 222.4 995 242.2 1023

GROUNDNUT PRODUCTION IN GUJARAT STATE:

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

Area 1 Ahmedabad 2 Banaskantha 3 Vadodara 4 Broach 5 Valsad 6 Dang 7 Gandhinagar 8 Kheda 9 Mehsana 10 Panchmahal 11 Sabarkantha 12 Surat 13 Amreli 14 Bhavnagar 15 Jamnagar 16 Junagadh 17 Kutchh 18 Rajkot 19 Surendranagar Gujarat State 1 4 10 13 3 1 4 5 1 3 36 62 2 1 1 4 148 1 26 326

Prod. 2 8 21 23 5 1 7 10 2 3 44 88 2 1 1 4 325 1 38 586

Y/Hec. Area Prod. Y/Hec. Area Prod. Y/Hec. 1799 1 1 1191 1 2 1634 1799 5 6 1191 2 3 1637 2010 31 39 1272 41 73 1797 1785 12 15 1191 10 14 1353 1799 2 2 1191 1 2 1635 1799 1 1 1191 1 1 1635 1799 2 2 1191 1 1 1635 1930 4 7 1715 3 6 2179 1799 1 2 1191 0 1 1650 759 7 9 1340 8 12 1629 1222 26 30 1161 17 24 1399 1418 72 109 1504 77 129 1662 970 5 8 1515 2 3 1115 1115 2 2 1021 233 344 1476 1799 15 37 2518 2 3 1637 946 19 25 1297 8 11 1412 2196 154 237 1535 154 291 1890 1799 1 1 1191 1 1 1655 1481 10 12 1191 6 11 1734 1798 370 545 1471 568 932 1640

Total Groundnut
Sr. No Name of District Area 2000-01 2001-02 2002-03 Prod. Y/Hec. Area Prod. Y/Hec. Area Prod. Y/Hec.

1 Ahmedabad 2 Banaskantha 3 Vadodara 4 Broach 5 Valsad 6 Dang 7 Gandhinagar 8 Kheda 9 Mehsana 10 Panchmahal 11 Sabarkantha 12 Surat 13 Amreli 14 Bhavnagar 15 Jamnagar 16 Junagadh 17 Kutchh 18 Rajkot 19 Surendranagar Gujarat State

8 20 31 22 7 42 7 30 54 21 321 177 2478 1458 3914 4067 761 3812 218 17448

4 14 29 26 6 16 8 19 22 10 237 166 423 132 92 4152 1087 217 222 6882

500 14 19 700 23 32 935 54 71 1182 27 37 857 8 10 381 42 59 1143 5 6 633 8 12 407 47 66 476 14 14 738 359 320 938 203 259 171 2816 4090 90 1935 2636 24 4106 5730 1021 4459 7196 1428 840 1017 57 3683 4659 1018 234 233 398 18877 26466

1357 1391 1315 1370 1250 1405 1200 1500 1404 1000 891 1276 1452 1362 1396 1614 1211 1265 996 1402

22 13 25 14 55 80 15 17 6 4 40 21 10 6 8 8 42 22 18 17 366 293 153 222 3132 2248 2289 2117 4464 165 4586 4133 535 757 4308 540 220 268 20294 10945

553 288 1472 1070 700 528 564 1096 515 982 801 1443 717 925 37 901 1414 125 1216 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.

BOLDS: Main producing belt is Keshod, Mangrol, Veraval and Porbandar, Junagadh district 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 size kernels. Count size is calculated on ounce basis. Count 35-40 means 35 to 40 Kernels of groundnuts in one ounce. 1 ounce = 28.5 grams.

CONSUMPTION PATTRN OF GROUNDNUT: Groundnut Production

Seed

Feed

Available for Crushing Trade in Seed

Export H.P.S Groundnut

Expeller

Ghani

Oil Repacker/ Filteration Refineries

Oil Cake

Wastage in form of Shells Oil Cake for home consumption

Solvent Extraction

Oil Retailers Domestic Consumption Industry

Deoiled Cake

Wastage

Family Packing

CON SUM ER

Export

Home Consumption

Drums (Loose)

Consumption pattern of Groundnut in India Crushed for oil Seed purpose Directly Use for Food

Percentage (%) 81 12 6

Export

90 80 70 60 50 40 30 20 10 0 Percentage (% ) Crushed for oil Seed purpose Directly Use for Food Export

Uses of Groundnuts: Groundnut is constituents of many household preparations. Rural as well as urban populations use them. Some common preparations are Chutneys, Dry powders, sweets and as an ingredient of fried rice and even Chapattis. The common 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 for 30 min at 82.2 C, 12% m.c. Drying at 82.2 C to 6% m.c. And flaking and removing oil by direct solvent extraction. The product is white flour, bland and virtually free of raw peanut flavor with 65% protein. Peanut Butter: This is the processed edible product. There are three types: (a) old fashioned butter. (b) Smooth butter and (c) chunky butter. Mostly varying in particle sizes of the groundnut in butter. The manufacture of butter involves roasting of the kernel to a controlled brownness followed by cooling and removal of skins (blanching). Spoiled and discolored kernels are removed at this stage. Then grind 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.

Groundnut based yogurt: Groundnut milk is prepared from groundnut protein isolate. The process of preparing groundnut yogurt involves pasteurization of groundnut milk containing 5% lactose, cooling inoculating with yogurt culture, incubating at 37 C for 4 hours and refrigeration. Chocolate flavored groundnut beverage: Milk like beverage prepared from oilseeds has great potential as nutritional substitute in areas where cow milk is too expensive or indigestible for some people. An acceptable chocolate flavored groundnut beverage can be prepared by mixing 3.5% fat, 8% sugar, 0.7% cocoa powder, 0.1% stabilizer and remaining water.

Boiled nuts: Unshelled immature nuts are boiled in medium brine and eaten fresh or frozen 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 or fully defatted nuts is also getting popular now a days.

Peanut Candies: More than 50 types of candies are made of groundnut, the most popular ingredients in American candies. Pre-cooked full fat peanut flakes: Blanched cotyledons (without germs) are dried to 2% to 4% moisture and are then ground to a fine paste. Water is added while heating and the slurry

is dried to get flakes. The flakes have high keeping quality. Flakes find use in 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 used to extract glycerin, which is about 9.8%. In medicine it is used as an olive substitute. It is reported to be useful as an aperients, emollient an in the treatment of infantile paralysis. Groundnut oil contains an inflammatory compound. I emulsion is used as an insecticide and also as suckericide in the control of tobacco suckers.

Route of Groundnut from farmer to exporter. The general pattern of marketing groundnut crop produce is a maze of situations where the transactions are conducted at the farm, village, regulated and unregulated market yards, brokers' offices, traders' offices, the oil expelling units, the decorticating units, etc. The entire chain of market activity was covered under this study except the regulated market since there are no groundnut-regulated markets in this area. Groundnut is marketed as pods in shell or as kernels after decortication. The export consists of kernels only. The marketing for the rainy-season crop generally commences in October and is over in February. The peak period

of marketing is in November-December when over 45% of the marketsurplus 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 as pods 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 defective weights and measures. The sellers have to pay tolls, taxes, commission, labor wages, weight men charges and deduction on charity at regulated markets. However, the growers can secure maximum value for their produce in the regulated markets. The methods of sale generally adopted is auction system.
Mkt. Yard

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

The contract is executed between Groundnut exporters broker and HPS unit. Following terms and condition are pre-fixed in this contract. 1) Quality 2) Count 3) Moisture 4) Price 5) Quantity 6) Delivery date and destination 7) Payment term 8) Packing requirement 9) Brokerage 10) Aflatoxin The role of broker is crucial because HPS unit doesnt deal directly with the exporter because of price sensitive market. The Contract copy is shown in APPENDIX Moisture is checked in HPS units with help of a handy instrument. While Aflatoxin is checked by Geochem or SGS institutions at port. The following traits are used to determine the export quality of groundnut
TRAITS Size Shape Color Flavor (Roasted) Texture (Roasted) Biochemical & Nutritional Aflatoxin Contamination DESIRABLE ASPECTS 60-70 counts for peanut butter, 45 counts for table purpose, 30 counts for table purpose Round or elongated with tapering ends. Tan, Rose Tan, Red. Almond, coffee, fresh, nutty, popcorn, smoky, and sweet. Firm and crisp texture. Law oil content, high protein content, high carbohydrate, high vitamins B1, B2, E, high in minerals like Ca, Mg, Fe, Low in anti nutritional compounds like oxalic and phytic acid. Free from aflatoxin lower limit 5 ppm and 30 ppm upper limit.

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 and exporting, 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 the interest 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 to achieve self reliance in oilseed production and save huge foreign exchange. The mission adopted following strategies. Improvement of oil seeds crop technology for stepping up field & project to farmer.

 Improve processing & post harvest technology, which can increase the oil from traditional and non-traditional sources of oil. Straitening services to farmer, particularly to supply for easy access to seeds, fertilizer, irrigation credit, etc. Improve institution for post harvest services including price support to processing industry. There are much other export promotion council such as the Agricultural and processed food Product Exports Development Authority (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 chamber of commerce. Earlier, Exporters code no. was to be obtained from the Export Control Department of Regional offices of the Reserve Bank of India in Prescribed form (from CNX)However, THIS REQUIREMENT HAS BEEN DISPENSED WITH FROM 1ST JANUARY 1997. 1) Import-Export (IE) code no. Is obtainable from the Regional offices of the Director of Foreign trade (DGFT) in prescribed form the available with them. Prospective Export-Importer is required to furnish certain 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 and allotment of Export-import code no. is a smoke kind of LICENCE/APPROVAL IN FAVOUR OF THE PROSPECTIVE TRADER (Importer/Exporter) in this direction. Allotment of I.E. code

number entitles the holder to undertake import-export transaction legally subject to further relevant rules and regulations prevalent at the time of such transaction. The customs authorities will not allow any person to import from or export to outside India unless he holds a valid I.E. Code Number.Howeveer, Following categories of importer-exporters are exempt 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 not connected with trade or manufacturing or agriculture. Persons importing goods from/to Nepal provide the CIF Value of single consignment does not exceed Indian Rs 25000 Persons importing/exporting goods from/to Myanmar through India-Myanmar Border areas provided the CIF Value of single consignment does not exceed Indian Rs 25000

2)

Trade License: Trade license is a right granted to a trader by the local authority like Corporation, Municipality etc. to conduct business legally at a particular place. Bank may refuse to open any account without such license. This license, in fact, recognizes a trader about its genuine existence.

3)

Bank Account: Settlement of all trade transaction (both domestic and international) must be routed through bank. In the present day situation, no one can think of any business without a Bank Account. Bank is the primary media for settlement of any transaction, which takes place between the two independent entities. Besides, bank Account is the primary source of certain important information leading to issuance of I.E. Code Number by the DGFT. 4) Membership with a Promotional Organization or Chamber of Commerce:

The importance of membership with a promotional organization or chamber of commerce needs no further introduction. Such organization helps their members in number ways starting from identification of market for a particular commodity and ending with realization of sales proceeds. These organizations also assist in sorting our disputes with overseas buyers and educate 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 the required business negotiable skills. The ability to negotiate effectively is required for discussion with importers & agents where the firm is exporting its products. Negotiating with business partners located in other countries is more difficult than local companies as the language & customs of the other party may be quite different from those at home. These factors add to the complexities of the transaction. Stages of Negotiation:The process of negotiation goes from a situation of contention to one of conclusion. Contention means that each party starts from a different point concerning what he or she hopes to achieve through negotiations. Conclusion refers to finalized agreements between the two parties on what they will each undertake to reach a common goal. Initial stage When the exporter meets potential agents in the target market he or she will have certain interests to pursue in the business dealings that will not necessary coincide with those of the other party. He may want the agent to work for a minimum commission. Further he may wish to sign up other agents in the same country to increase sales and may limit the agency agreement for a short period to test the market. The potential agent on the other hand may demand a higher commission than is being offered. He may demand exclusively within the country and may ask for a contract spanning several years.

In such situations the exporter will need to know how to proceed in the talk to ensure that most of the firms interests are covered in the final agreement. Intermediary Stage The step following the contention stage is clarification and comprehension. Here both the exporter and potential agent should clarify their views and see the viewpoint of the other party. The next step is that of credibility and confidence i.e. the potential agent may appreciate the exporters for larger profits especially for reinvestment. The exporter must also have confidence that the agent will put maximum efforts 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 agreement signed by the exporter & potential agents would incorporate at least some of the exporters primary concern and some of the agents main consideration. Points to Remember: When conducting business negotiations certain points are to be kept in mind that may be useful as the negotiations proceed: 1. 2. 3. Situation to avoid during the negotiations: controversy and criticism. Attitudes to develop during the talks : Communication, collaboration and cooperation 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 should draw up a plan of acting beforehand, address a few key issues. Market Research

Knowing what buyer wants or needs requires advance research. Besides customers preference an exporter should assess competition from both domestic and foreign suppliers and be familiar with the process that they quote. The distribution channel used for the product and promotional tools and message required should be examined. Such information will be useful when negotiation with buyer. The more that is known about the target market and the buyer for the products concerned the better placed the exporter is to conduct the negotiations and match the offer to the buyers needs. 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 be made to match the export firms size financial situation, production capacity, technical expertise, and organization strength & export commitment with compatible 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 buyers requirements 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 examine the export order carefully. Among the most important Act/publications which should be consulted by an exporter in connection with the processing of an export order, it execution and its fulfillment are the Customs Act 1962. Carriage of Act, 1973, Schedule of Charges of Goods in respect of the port of shipment, Handbook of Export Promotion, Import-Export Policy Volumes I and II, and handbook of Import Export Procedures.

The main parties involved in processing are the exporter, foreign buyer the negotiation bank, the shi-ping company, the insurance company, the Reserve Bank of India, the Chief Controller of Imports & Exports, the collector of Customs, the Port Commissioner and the clearing and forwarding agents. The various aspects relating to processing of an export order are discussed under. NATURE: Export order is a document communicating decision of foreign buyer to purchase items from the exporter. It would clearly indicate the exporters proforma invoice/quotation numbers and its date including item, quantity, price, delivery date, shipping marks, insurances, payment terms, documents required etc. ACKNOWLEDGEMENT: The exporter should write a simple letter to the overseas buyer thanking him for the export order and stating that the confirmation of the same would be sent soon. SCRUTINY: The export order should be scrutinized on the following aspects 1) 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 supply the 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 the packing 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, Packing List and insurance Policy. CONFIRMATION:

If the exporter is satisfied on various aspects referred above, a formal confirmation of the export order should be sent to the buyer. CLARIFICATION: If the exporter is completely satisfied with the terms of the export order then he 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 sea freighting of the export consignment as per the delivery period commitments made to the buyer. If the terms of contract are in order, a delivery containing the specification and other details of the order is sent to the factory for the manufacture or dispatch of export cargo the part of shipment. EXPORT FINANCING: Financial assistance a extended by the banks to the exporters at the stages namelyPre-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-shipment finances, packing credit is the most essential. Packing credit may be taken a equivalent to cash credit in domestic business except that case credit facility is sanctioned as a continuous facility whereas packing advance is disbursed for a specific purpose o enable the exporter to meet specific export obligation. 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 be produced for export happens to be more than the FOB (Free on Board) value of the contract considering the export incentives available for the exportable commodity the advances at pre-shipment level are sometimes granted for more than FOB value concessional rages of interest which is applicable to packing credit advance i.e. 13% is also available for 90 days on such advance.

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

Post-shipment Finance: Post shipment finance means any advance granted to an exporter after shipment of goods. The need for post-shipment finance arises because exporters who sell goods abroad have to wait for a long time before payment is received from overseas buyers. The period of waiting depends upon the terms of payment. Based on different types of terms of payment, different methods of financing are being devised. Advance against Export bill sent on collection: It may sometimes be possible to avail advance against export bills sent on collection. In such cases the export bill will be sent by the bank on collection 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 the exporter for sale and eventual remittance of sales proceeds to him by the consignee/agent, bank may finance against such transaction subject to the customers 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 the full invoice value of the goods but to leave small p[art undrawn for payment after adjustment due to difference in rates, weight, quality etc to be ascertained after approval and inspection of goods. Banks finance such undrawn balance provided within 6 months from date of shipment of goods the exporter will surrender the balance proceeds of shipment. DOCUMENTS UDED IN FOREIGN TRADE-EXPORT/IMPORTS

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 of Vessel, Certificate of origin, etc. Exchange Control Documents otherwise known as official documents: For exports. Export Declaration Forms: Current Exchange Control Regulations require that all exporters must declare value of goods proposed to be exported along with relevant details viz: name of buyer, country of destination, FOB value etc. together with an undertaking to the effect that proceeds will repatriated into India within Due Date or 6 months from date of shipment whichever is earlier, in the Exchange Control Declaration forms like GR/PP/COD/SOFTEX. Reserve Bank of India prepares Balance of Payment statistics on the strength of these. All these forms bear distinct serial numbers with a two-alphabet prefix following by six digit numerals. These forms are required to be unutilized within a specific validity period. GR FORM: It is issued in duplicate. This form is used for exports to all countries other than by post. The exporter is required to get GR form passed by the custom authority before shipment. The custom authority retains original and returns duplicate to the exporter for submission to his banker latest within 21 days from the date of shipment along with other shipping documents. PP FORM:

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

VP/COD FORM: This form is used for exports to any country by Parcel Post under arrangement 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 and precious stones normally use these forms. SOFTEX FORM: This form is used for export of computer software in non-physical form i.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 or their authorized agent instead of custom authority as usually happens in case of 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 Exchange performs 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:

It is a statement of Sales and Purchase. The primary contents of a commercial invoice are a) b) c) d) e) f) Name of buyer Mode of dispatch/shipment of goods-by steamer/air/post. Description, rate, quantity, unit price of merchandise Terms of Sales i.e. FOB, CFR OR CIF etc. Total value 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 invoice must be authenticated/attested by the Consulate office of the buyers country. The primary propose of such invoice is the ensure the price quoted in the invoice must be matching with the prevailing price of the same commodities in the International market. (C)Packing/weight List: As the name suggests, it is a detailed statement of packing/weight of merchandise. (D) Risk covering Documents: Goods in transit are exposed to various risks till it reaches to buyer. Such risks consequently results into loss to the buyer. To avoid such unwarranted loss, goods in transit should be adequately covered with a General Insurance Co. from the point of loading to the place of final destination.

(E)

Document of Title of Goods:

Normally, following types of transport documents are used which serve as a title to goods, viz. 1. Bill of Lading The bill of lading is a document issued by the shipping company or its agent acknowledging the receipt of goods mentioned in the bill for shipment on board of vessel and undertaking to deliver the goods in the like order and condition as received to the consignee, provided the freight and other charges 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, gross weight 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 bill of lading. 3. Air Consignment Note/Airway Bill Acknowledgement of goods issued by a particular Airway or their Authorized Agent. It is issued in terms of conditions of the contract of carriage of goods. It is legally 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. It is normally issued by e\the Health Dept. of the concerned State or authorized representative of buyer. Regulation of certain countries does not permit unloading of such goods unless suppo0rted by Health or

Phytosanitary certificate. However, this certificate is required for exporting plants also. (B) Inspection Certificate As the name suggests, such certificate is issued by the reputed Inspecting Agencies like SGS, LLOYDS International etc. Which certifies about the quality and/or quantity and/or description of goods before it is put On Board the ship. Such certificate protects the buyer from being cheated by the unscrupulous seller by supplying inferior quality of goods and/or supplying 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 vessel can withstand long Journey or not. Sometimes, some unscrupulous traders ship valuable materials in a very old ship with a view to cheat the consignee by taking out the goods in the midway in connivance with the shipping company and its crew members before it is brought to mid-sea and scuttled to force it sunk. (D) Certificate of Origin This certificate is generally issued by the Chambers of Commerce in the sellers country in the prescribed form certifying that the goods are of supplier countrys origin. Similarly, GSP certificate of origin is a must for Indian exporters supplying goods to any EEC countries. This GSP certificate 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 of commerce (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 as INCOTERMS(International commercial Terms).The primary objectives of these incoterms is to explain how costs and risks should be divided between

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 of commerce which have since been revised in 1996 indicating the primary duties of the seller/exporter and the buyer in respect of transportation of goods 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 the sellers premises to buyers premises will be on buyers account. 2. FCA Free carrier 3. FAS Free Alongside ship 4. 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 of carrying from the sellers warehouse/premises will be borne by the seller whereas cost and risks of loading and/or carriage to distention will be left on the buyer. CFR Cost and Freight CIF Cost, Insurance & freight CPT Carriage Paid To CIP Carriage and insurance paid to. Under these contracts, the seller bears cost of carriage and risks of loss but without incurring damage to the goods or additional cost attributable to events after shipment, 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)
5. 6. 7. 8.

The seller, under these terms of sale contract assumes all risks and costs up 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.

PROCESS OF APPROACHING A FOREIGN BUYER India exporters and trade houses should approach the overseas importers/animal feed producer giving their complete profile, detailing information 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 they are in a position to ship from India and time period required by them to actually 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 also informed to them regularly with which they can effect shipment as well as the total quantities than can be shipped each time. Samples of products when sent should be accompanied with a detailed analysis report. The report should be from a laboratory whose competence is recognized internationally. Samples of the consignment being shipped should be dispatched immediately after loading of the consignment. This is because the importer would like to check the quality of the consignment they are actually getting. By its inherent mature the trade of groundnut is based on thrust. Purchase are made at times on the basis of telephone calls and importers are wary of taking risks with people not known to them and whose performance record is not known to them. Apart from incidental purchases, importers deal only with firms on a long-term basis and do not change supplies easily. In a new relationship, Indian exporters should adhere to L/C (Letter of Credit) 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.

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 fluctuate on 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 local market 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 for transport the loads the Groundnuts. Thus, the transport charges are borne by him but he transfers them to the exporter by including the charges in the cost of Groundnuts.

3. Charges at port which are paid by custom clearing agent of the trade house. These charges include Port charges Handling charges Storage charges Documentation charges 4. Fright and insurance of groundnuts movement to the importer country from the port. These charges are borne by importer. 5. The interest charges on the money paid for procurement of the groundnuts at the local market for the numbers of days in which actual exports is realized. Local market agent is paid on behalf of the supplier along with this commission, 95% of the full mouth on the realization of the purchase. The 5% 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 to incur 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 the buyer at the named port of the shipment. Bears all cost and risks of the goods until such time as they shall 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 of the same to the trade house.

 Bears all costs & risk of the goods from the time when they shall 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. 2. 3. 4. 5. 6. 7. 8. 9. Providing invoice and packing list Provides certificate of origin Loads goods on the carrier Provides and pays inland transport insurance cost Pays for demurrage Obtains export documents Delivery of goods to port Unloading of goods at port Pays port dues

The importer, within the month of the export agreement notifies the exporter of the arrival date of its ship and the date by which the exports should make the consignment available at the port. After incurring all the costs, if the trading house makes some profit or very thin marginal profit, it goes ahead with the exports. The profit rates in international trade of agro products are very low. For an exporter, the amount of profit is not as important as the total amount of export turnover since the Government provides incentives to the exporter on the basis of their turnover. These incentives are what the exporters are looking 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

The groundnuts are transported from the local market to the port on rail or truck. Usually, the groundnuts are taken by truck due to the not very large quantities transported. 1. Sweeping the loss in groundnuts from the point the surveyor. (Nominated by importer) measures the weight to the port. It consists of Fly-Off loss groundnuts are light in weight hence some of it flies off while transaction. 2. Pilferage groundnuts fall down during transaction. TRANSPORTATION OF GROUNDNUTS.

There are two levels of transport 1. Inland- Road 2. Sea Shipping The limitation of road transport The road transport is very expensive. The freight carrying capacity of the truck has been brought down to 9.5 MT from 12.5MT. this has increased the road transport costs. The limitation of sea transport 1. 2. 3. 4. 5. 6. 7. Delayed docking of ships for berthing and carting space. Traffic congestion at ports High port handling charges Port labor problems Lack of mechanical handling Inadequate loading facilities High shipping charges.

Aflatoxins in Groundnut: Groundnut and its products are good substrates for the growth of Aspergillus Flavus and consequently production of aflatoxin. Aflatoxin contamination is a serious quality problem in groundnut. High aflatoxin load in HPS grade kernels and deoiled cake has seriously jeopardized our export earnings. Thus, aflatoxins have become the subject of concern in agriculture, as well as in animal and human health on a global scale. Natural occurrence of Aflatoxins: Groundnut and its products are good substrates for the growth of Aspergillus Flavus will grow only when the moisture content of groundnut samples exceeds 9%. The cake, rich in protein when processed under unhygienic conditions generally contains high levels of aflatoxin. Studies conducted at the Central Food Technological Research Institute (CFTRI), Mysore, revealed that aflatoxin is also problem in groundnut oil. It was found that unrefined oil samples had an appreciable amount of aflatoxin ranging from 0.06 to 0.26 ppm. While refined oil samples were devoid of such contamination. Studies carried out at the National Research Center for Groundnut Junagadh reveled those groundnut kernels immediately after harvest and 3 days after windrow drying contained 0 to 49 ppb of aflatoxin. Factor Responsible for Aflatoxin Production:

The nature of the strain of the fungus substrate PH, temperature, relative humidity, moisture content of the substrate and aeration have been found to influence the quality and quantity of aflatoxins produced. The optimum limits for growth of Aspergillus Flavus and Aspergillus parasiticus are 8285% relative humidity and 30-32 C. Fungal growth is optimum when moisture levels of the substrate range from 15 to 30%. The optimum conditions for aflatoxin production are between 25 C to and 30 C at 85% relative humidity. When the atmospheric relative humidity is near 70% the seed moisture content will equilibrate between 7 and 9%. This is a level unfavorable for the growth of the A. Flavus group. Pre mature drying of pods and shell damage and kernel splitting during growth may lead to toxicity at harvest. These conditions may result from termite and nematode damage to the root tissue, root-rot or sem-rot caused by fungi. Mechanical damage to the pods during weeding and other intercultural operations, drought and long exposure of groundnut pods after harvest to atmosphere congenial to the growth of fungus. During storage, presences of mites, which are capable of carrying the spores of A. Flavus, increase the chances of infection. Control of Aflatoxin: In view of the known hepatoxic properties of aflatoxins their widespread occurrence during cultivation, harvest, drying, storage and transit of groundnut and loss of HPS export market. Immediate attention and efforts are needed towards achieving effective control measures. Three basic approaches prevention, removal and detoxification seems to be promising for aflatoxin control.

Prevention of mold contamination is the best control measure for aflatoxin problem in peanuts. Woodroof (1983) has suggested the following measures to avoid contamination. 1. Control nematodes, weeds and insects with appropriate chemicals, if necessary. 2. Irrigate the crop regularly keep moisture level constant so as to prevent growth cracks. 3. Harvest when peanuts are neither immature nor over mature. 4. Avoid damage to pods during digging use digger/shaker inverter.

5. Dry rapidly to 20% moisture in the windrow, then combine and dry artificially to about 10% moisture. Under high humidity or rainy climate combine immediately and transfer dried peanuts to artificial drying system. The drying operation need to be continuous and without break. 6. Store immediately under conditions that will ensure no further moisture uptake by the peanuts. 7. Based on the results obtained at the National Research Center for Groundnut. The use of rock salts (2%), plant products like asafoetida (hing), 0.1% if pure and 2% if impure, turmeric powder (2%) and aqueous 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 have attained full maturity, sorting or discarding the immature or underdeveloped pods, minimum mechanical damage during harvesting, curing (windrow drying) at ambient air and sunlight for 1-3 days to reduce moisture content to 18-25% 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 during storage.

CONCLUSTION:
PRODUCTION:

Groundnut originated in the southern Bolivia/north west Argentina region in South America and is presently cultivated in 108 countries of the world. Asia with 63.4% area produces 71.7% of world groundnut production followed by Africa 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, Burkina Faso, Guinea, Mozambique, and Cameroon in Africa; Argentina and Brazil in South America and USA and Mexico in North America WORLD GROUNDNUT EXPORT: Groundnuts, a staple food for many developing countries, deserve a closer look as an export commodity. Less than 6% of the world groundnut crop is

traded internationally, with export sales averaging close to US$ 1 billion dollars 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 major challenges: ensuring food safety by preventing and controlling mycotoxin contamination of products and adapting groundnut supplies to demand for varieties best suited to specific end-uses. Groundnuts are widely cultivated as staple food in tropical and sub-tropical developing countries, providing a valuable source of proteins, fats, energy and minerals. Most of the worlds groundnuts are produced and consumed in developing countries. Less than 6% of the world production is exported. Most of the edible groundnuts are not cultivated for export purposes. In other words, producers do not usually grow the groundnut varieties best adapted 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 highyielding 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 hectares are under groundnut cultivation and 6 million tons are produced yearly. India is the second largest producer, with surfaces under the crop exceeding 8 million hectares and outputs averaging 5.6 million tons per year. The United States, Nigeria, Argentina and Indonesia are the following largest producers, with annual outputs varying between 1 and 1.5 million tons per year. Groundnut production in African countries fluctuated greatly, though it never exceeded 8% of the world output over the last decade. Yields per hectare are low, because of a combination of factors: unreliable rains; mostly non-irrigated cultures; small-scale, traditional farming with little mechanization, outbursts of pests and diseases and use of low-yielding seed varieties; and increased cultivation on marginal land. Political instability and the frequently unsupportive oilseed policies have also played their role.

Yields vary Yields in producing countries vary significantly, depending on climate, soil, farming systems and seed varieties. The spectrum is wide: over 2 tons per hectare (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, South Africa and Myanmar; and only 0.50.7 t/ha in the other African countries and 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 the world export trade in 1997/98: Argentina (245,000 tons); India (240,000 tons); United States (230,000 tons); China (185,000 tons), Viet Nam (98,000 tons); South Africa (40,000 tons) and the Gambia (20,000 tons).

Importers Similarly, the five largest net importers purchase about three-quarters of current 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 during the last six years. China, although it has become the largest producer, lost over half of its shares in the export market of hand-picked selected groundnuts, mainly because of the increase of the domestic consumption. India moved up to second place; Argentina and Viet Nam doubled their shares, while exports from the United States decreased slightly, facing strong competition from Argentina. World export trade averaged 1.2 million tons of groundnuts, valued at over US$ 948 million per year over the last five years, out of which nearly twothirds was provided by developing countries. About 80% of exports consisted of edible groundnut varieties, with the remaining 20% of groundnuts used for crushing. International prices of edible groundnuts fluctuated widely over the last decade, influenced by both market fundamentals and seasonal factors.

SUGGESTIONS: 1) The Groundnut production tons per hectare of various region is given bellow. United States 2 T/HA China and Argentina 1.81.9 T/HA Indonesia, Brazil, Thailand, Viet Nam, Mexico, South Africa and Myanmar 1 T/HA African 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 exporting its major Groundnut to Indonesia. What we suggest that European market should be the target market to earn valuable foreign exchange. To do this we have some problem of quality but that can be solved. The major problem is of aflatoxin. But this problem has solution while farming. Exporter suggests farmers to produce Groundnut in a particular manner with a contract of purchasing.

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 Agro Economic Zone to motivate the exporters.