Groundnuts (peanuts) 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. Oil extracted from the groundnut can also 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; fertilisers and antibiotics.
Sources: The Groundnut Market Value Chain Profile at www.daff.gov.za.
International business environment
China is the leading global producer of groundnuts, and contributes some 8% to world exports. India is second placed, with a healthy 37% contribution of exports. Nigeria is the top African producer of groundnuts, with the crop accounting for some 70% of that country’s export earnings. Other significant growers include the US, Sudan and Indonesia.
The National Peanut Board (USA) and Agricultural Marketing Resource Centre (AgMRC) websites contain helpful information about groundnuts. Visit http://nationalpeanutboard.org and www.agmrc.org/commodities-products/nuts/peanut-profile/ respectively.
Local business environment
The South African Grain Information Service (SAGIS), a not-for-profit company funded by, amongst others, the oilseeds industry, performs the information function. Statistics (e.g. crop estimates, export/import etc) may be found on the South African Grain Information Service website – www.sagis.org.za. Find the most recent Groundnut Forum presentation under “Presentations”. Find the Grading Regulations for groundnuts and requirements for grain exports at http://agbizgrain.co.za.
In South Africa groundnuts are traded for three main functions: for edible peanuts and peanut butter, for oil and oilcake, and for seed. Edible peanut consumption has been decreasing over time, while the market for peanut butter has remained steady. The local consumption requirements for groundnuts are around 63 000 tons per year. Of this, around 37% is consumed as peanuts. The rest is processed into peanut butter, oil and other products.
South Africa is usually self-sufficient in terms of groundnut production. Groundnut production has been on the decline since the mid-1980s though. Reasons include higher labour costs (this is a labour intensive crop) and slow seed-breeding developments. The Bureau for Food and Agricultural Policy (BFAP) has suggested that in terms of cultivar development, this country has been left behind by a number of major groundnut exporting countries. The 2016/17 crop, at 18 850 tons, was the smallest since 1945/46. This is attributed to the drought caused by the El Nino.
Groundnuts are mainly produced in the north-western regions of South Africa, namely the western and north-western Free State, Northern Cape and the North West Province. Groundnuts are also produced in Limpopo, Mpumalanga and KwaZulu-Natal but production is lower in these provinces.
In South Africa, production of groundnuts is usually higher than consumption. In the average year this translates to around a quarter of the crop being exported. Exports went to Mozambique and Japan. Other significant amounts went to the Netherlands and Belgium (SAGIS, 2017). Even though this is a relatively small proportion of the total crop, it is important for the profitability of the producers and primary processors. Phytosanitary requirements and quality standards must be adhered to and a Perishable Products Export Control Board (PPECB) certificate must also be obtained for groundnuts to be exported.
The domestic price is more or less on a par with the international price and is not influenced much by the size of the local crop. The key suppliers of groundnuts to South Africa recently, mainly as a result of the drought, have been Argentina, Brazil and Mozambique. India and Malawi are other significant suppliers (SAGIS, 2017). The import tariff for groundnuts is 10% of the fob price.
The relative prices of other grain products, the exchange rate, availability of seed, availability and landed cost of imported crude oil, as well as plantings of other field crops mainly determine market prospects for the oilseed industry (which includes groundnuts). Oilseeds have an indirect impact on industries in which balanced feeds constitute a major input cost. The animal feed chain tends to link oilseeds with the costs of dairy products, beef, mutton, pork, broiler chickens and eggs.
The groundnut marketing season in South Africa commences on 1 March and ends on 28 February the following year. See the monthly bulletin on the SAGIS website for updated information.
Sources: Agbiz commentaries (15 July 2016, 4 October), SAGIS and AM Cronje.
Commercial farmer points of interest
Aspects of Critical Importance concerning Groundnut Production
- Groundnuts may not be planted more than once in three years on the same land.
- Soil moisture is critical. Do not plant in dry soil. Ground which has built up soil moisture will diminish risks.
- Weed control is important: weeds hamper the cultivation process and use up valuable soil moisture.
- Quality seed is a priority. After treating the seed, plant slowly and shallowly (30mm – 50mm)
- Avoid planting in cold soil.
- Remember that most cultivars require 150 days to yield a respectable crop: do not plant too late.
- 18 kg Nitrogen (N) per hectare for dryland growing and 50kg N/ha for irrigation are recommended if your soil needs nitrogen.
- Calcium is important for the formation of the pods. Areas where the calcium content is lower than 300 mg/kg, must be fertilised with calcium.
- When fertilising, do not place fertiliser in the pod zone. Administer fertiliser widely or place it under the kernel.
- Given the high value of groundnut hay and the potential drop in kernel quality and yield, leaf spot must be thoroughly treated. Under irrigation conditions, attention must be paid regularly to this.
- When groundnuts are planted in soil where no groundnuts had been planted for more than eight years, the seed must be inoculated with the correct Rhizobium bacteria. The seed must then be further treated with Thiulin or TMTD against fungal diseases. Groundnuts that are not inoculated can be treated with Ifax.
- Beware of Atrasine damage resulting from previous administrations.
- Be prepared for windy conditions.
Source: www.suidwes.co.za and Dr Jan Dreyer
For the newcomer
Find the grower notes mentioned under the “Websites and publications” heading in this chapter.
- Groundnuts are rich in protein and can be eaten raw, cooked or roasted.
- Some types are cultivated under drier conditions, while others are irrigated.
- Groundnuts are more drought-resistant than maize and can be grown for home consumption or as a cash crop. They work well as a rotational crop and should be planted on the same soil once every four years.
You can market groundnuts in shelled or unshelled form, either on formal or informal markets. Formal markets need larger quantities.
For a complete list of members of the SA Groundnut Forum, contact Mr G Keun at telephone number 011 234 3400.
- Grain SA Tel: 0860 047 246 www.grainsa.co.za Find the notes on Grain SA in the general “Grain & Oilseeds” chapter.
- South African Grain Information Service (SAGIS) Tel: 012 941 2050 www.sagis.org.za See the notes about SAGIS in the general “Grain & Oilseeds” chapter.
- Oilseeds Advisory Committee Tel: 011 234 3400 www.opot.co.za
- South African Cereals and Oilseeds Trade Association (SACOTA) Tel: 012 663 9097 www.sacota.co.za
- South African Groundnut Forum Tel: 011 234 3400
Training and research
- The Agricultural Colleges do short course training on groundnut production and groundnut processing. Madzivhandila College, for example, offers a course in peanut butter making. Find contact details in the “Agricultural education and training” chapter.
- ARC-Grain Crops (ARC-GC) Tel: 018 299 6100 www.arc.agric.za A short course on groundnut production can be given on demand.
- Grain SA also offers emerging farmers a week long introduction training course on producing groundnuts. Find details in the “Developing farmer support” chapter.
- NOSA Agricultural Services Tel: 087 286 9298 www.nosaagri.co.za Training and/or training materials available.
- Oil and Protein Seeds Development Trust Tel: 011 234 3400 www.opot.co.za The Oil and Protein Seed Development Trust provides funding for research on sunflowers, soybeans and groundnuts that is in the interest of producers, processors and consumers.
- Protein Research Foundation Tel: 011 803 2579 www.proteinresearch.net
- GWK Ltd Tel: 053 298 8200 www.gwk.co.za
- NWK Ltd Tel: 018 633 1000 www.nwk.co.za
- South African Grain Laboratory (SAGL) Tel: 012 807 4019 www.sagl.co.za
- Suidwes Tel: 018 581 1000 www.suidwes.co.za
For a full list of seed suppliers, visit http://sansor.org/groundnutpeanut/
- Dryers for Africa Tel: 082 925 4396 www.dryersforafrica.co.za Nut butter extruder
- FS Peanuts Tel: 083 795 2497 www.facebook.com/fspeanuts/
- Golden Peanut Tel: 053 474 1345
- Just Nuts Tel: 062 634 5300 www.skemaprodukte.co.za
- Lemacor Tel: 053 474 0110
- Olam SA Tel: 031 566 5499 http://olamgroup.com
- RE Groundnuts (subsidiary of the Rhys Evans Group) Tel: 056 343 3311 www.re.co.za
- Roast Tech Tel: 051 435 0888 / 082 770 5711 www.roastech.com
- Roba Foods Tel: 018 330 0001
- SA Groundnut Marketing (Pty) Ltd Tel: 053 444 1407 / 082 415 7611
- Sidestep Boerdery Tel: 056 515 1238
- The Snack Factory Tel: 011 485 3887
- The New Nut Company Tel: 018 330 0006 www.newnut.co.za
- Thokoman Foods Tel: 012 811 0501 http://goodythokoman.co.za
- Tiger Brands www.tigerbrands.com
- Vaalharts Groundnuts Marketing Tel: 053 474 1121 http://groundnuts.co.za
- Zesto Grondbone Tel: 053 444 1540
Websites and publications
Visit the websites mentioned earlier in this chapter like www.sagis.org.za.
- Publication available from ARC-Grain Crops: (i) Production of groundnuts (“Groundnuts always tops”) (ii) Produksie van Grondbone (“Grondbone – altyd ‘n wenner”) (iii) Groundnut production: a concise guide (iv) Groundnut diseases and pests / Grondboonsiektes en -plae. Visit www.arc.agric.za or call 018 299 6100. The leaflet “The manufacturing of peanut butter” is available from ARC-Agricultural Engineering in Silverton. Call 012 842 4017 or email iaeinfo [at] arc.agric.za.
- The Bureau for Food and Agricultural Production (BFAP) has produced some studies on groundnuts like Evaluating the Sustainability of the South African Groundnut Industry, Groundnut Supply Chain and South African Groundnut Industry – February 2012 reports at www.bfap.co.za. Its Baseline Agricultural Outlook 2015-2024 placed processed Nuts (includes groundnuts) on its Top 20 products list, showing the potential of backing this product.
- Find the latest annual Groundnut Market Value Chain Profile from DAFF at www.daff.gov.za (on the Directorate Marketing web pages). There are also grower notes under the options “Infopak” – see “Groundnuts“, “Cultivation of groundnuts“ – and “Brochures”, the Production guidelines: Groundnuts.
- Food Safety Requirements for the local and international marketing of groundnuts is obtainable from the SA Groundnut Forum. Call 011 234 3400/1.
- Staff Reporter. 2017, December 16. “Groundnuts: a useful rotation crop”. Farmer’s Weekly. Available at www.farmersweekly.co.za/farm-basics/how-to-crop/groundnuts-useful-rotation-crop/