Peanut Market News June 25, 2018
Europe is a large market for groundnuts, with an estimated consumption of 550,000 tonnes per year. Imports show a growing market, with an annual increase of 1.2% in volume (4.3% in value) from 2011 to 2015. Groundnuts are consumed as snacks, processed as food ingredients and crushed for oil. This study focuses on groundnuts for the European food manufacturing and oil crushing industries. In the food manufacturing segment, groundnuts are used as ingredients in peanut butter, chocolate and other food and snack preparations. One of the main challenges for exporters is complying with maximum levels of aflatoxin and other contaminants.
1 . Product definition
Groundnuts, or peanuts (Arachis hypogaea) are a legume, root crop. They are native to South America, but are cultivated in many (tropical and sub-tropical) parts of the world.
In Europe, groundnuts are consumed as snacks, crushed for oil and processed by the food industry. A small share is also destined to the pet / bird food market.
Groundnuts can vary from pale brown to pink to deep reddish brown, and have different shapes and processing characteristics according to variety. Each variety may be particularly suitable for specific uses in the food industry.
Varieties differ from one producing region to another. For example, the varieties available in India are Bold Java and Spanish. In Argentina, Runners account for around 95% of the peanut crop. There are also varieties like Pampo Jumbo, Manigran and Virginia. In the United States, the existing varieties are Virginia, Runner and Valencia.
2 . What makes Europe an interesting market to target?
The European market for groundnuts is growing.
The European market for groundnuts has grown over the last few years, which is substantiated by the growth in imports.
European imports of groundnuts have grown since 2011. In 2015, Europe imported 804,000 tonnes (€1.1 billion) of groundnuts, marking an annual increase of +1.2% in volume and +4.3% in value since 2011.
The Netherlands is the largest importer
The Netherlands is the largest importer
The Netherlands is by far the largest importer of groundnuts in Europe. Other interesting European markets for exporters are Germany and the United Kingdom. Spain, Poland and Italy also have a significant importing and consuming role in Europe.
A large proportion of the groundnuts destined to Europe come in through the port of Rotterdam. The Netherlands accounted for 40% of total European imports in 2015, with an annual increase of 1.4% in volume and 6.1% in value since 2011.
Germany and the United Kingdom are two other large importers of groundnuts in Europe. Germany accounted for around 16% of total imports in Europe, and the United Kingdom had an 11% share in 2015. German imports have increased in volume (+1.8% annually) and value (+3.6%) since 2011, while British imports have declined (-2.8% in volume and -1.8% in value) since 2011. Significant ports in these countries are:
Felixstone (United Kingdom)
Tilbury (United Kingdom)
Spain, Poland and Italy are smaller but important importers. They each accounted for a share of around 5.0% in total European imports of groundnuts in 2015. All these countries have experienced an increase in both volume and value since 2011.
The main suppliers of groundnuts to Europe, and thus your main competitors, are:
The United States also has an established position and strong groundnut industry, making competition fiercer on the European market.
More than 60% of groundnuts imported into Europe are sourced directly from developing countries, amounting to 496,000 tonnes (€637 million) in 2015. Imports from developing countries had an annual decline of -1.8% between 2011 and 2015, but increased in value by +1.5% annually.
Large developing country suppliers of groundnuts to Europe are Argentina, China and Brazil.
Argentina is the largest supplier of groundnuts to Europe, accounting for a share of 42% (volume) of total European imports, at 338,000 tonnes (€412 million) in 2015. It has shown a slight annual decline of -0.2% in volume and an increase of +2.6% in value since 2011. Good weather conditions in 2015/16 point toward an improvement in yields compared to recent years, when crops were affected by drought.
Other large developing countries that supply groundnuts to Europe are:
Smaller, but also significant exporters to the European market are:
Chinese supplies experienced a strong annual decline of -10% in volume and -4.0% in value between 2011 and 2015, accounting for 65,000 tonnes (€102 million) of European imports.
China’s decline as an exporter to Europe is related to the increase in Chinese consumption of peanuts and to aflatoxin contamination. Local production is struggling to keep up with this growth and Chinese buyers are already sourcing from suppliers elsewhere, including West Africa and the United States. Around 50% of the peanuts in China are used for edible oil production, but the demand for groundnuts as snacks is also rising.
Brazil experienced an annual increase of +7.2% in volume and +11% in value between 2011 and 2015. This increase reflects the record-breaking harvests in recent years. In 2015/16, production reached 346,800 tonnes. The growth in production is mainly explained by the increase in planted area in the state of São Paulo.
The increase in Nicaraguan supplies was even more significant, at an annual rate of +16% in volume and +20% in value.
Among developed countries, the United States occupies a leading position. It is the second largest supplier to Europe, accounting for 16% of total imports. Although supplies from the United States to Europe increased between 2011 and 2015, there was a decrease between 2013 and 2015 due to competition from Latin American suppliers and options in new markets for North American exporters.
Other large producers of groundnuts are India (6.5 million tonnes in 2014), Indonesia (1.1 million tonnes), Myanmar (865,000 tonnes), Ghana (426,000 tonnes), Guinea (297,000 tonnes) and Angola (252,000 tonnes). However, these producers do export large amounts of groundnuts to Europe.
Re-exports are declining slightly
European re-exports of groundnuts declined slightly between 2011 and 2015.
Re-exports amounted to 165,000 tonnes (€ 229 million) in 2015, declining at an annual rate of -0.8% in volume and -1.1% in value since 2011.
The largest re-exporter of groundnuts in Europe is the Netherlands, an important trade hub for oilseeds worldwide. The country accounted for around 78% of total European exports in 2015.
The main destination for re-exports from the trading hub of the Netherlands is Germany, which received over half of total European re-export and transit trade in 2015. Germany is the largest European food market and has the largest food industry in the region, which commands a high demand for ingredients like groundnuts.
European production of groundnuts is limited
European production of groundnuts increased between 2010 and 2014, with an annual average of +5.5%. However, production is still limited (only 11,000 tonnes in 2014).
The two largest European producing countries are (source: FAOSTAT):
Bulgaria (8,600 tonnes)
Greece (2,600 tonnes)
In comparison, worldwide production of groundnuts was estimated at 27 million tonnes in 2014/15.
Bulgaria and Greece both recorded growth in production.
Peanuts and peanut butter account for a large amount of the nut consumption in Europe
Trade statistics do not distinguish the different end-uses for groundnuts. However, existing statistics reveal that:
About 550,000 tonnes of peanuts are consumed in Europe each year.
Peanuts and peanut butter account for around 33% of nut consumption.
In 2015, 34,000 tonnes of groundnuts were crushed in Europe, led by the Netherlands (10,000 tonnes), Greece (9,000 tonnes) and Italy (8,000 tonnes). Around 65,000 tonnes of groundnut oil were imported into Europe in 2015.
3 . What trends offer opportunities on the European market for groundnuts?
The groundnut market is shaped by trends in the edible nut, oilseeds and vegetable oil sectors. You can read about general trends on the edible nut market in our study on processed fruits and vegetables and edible nuts in Europe. And see our studies on general trends on the oilseeds market and the vegetable oils market.
Specific trends related to food manufacturing are given below.
Largest peanut butter markets in Europe are growing
Peanut butter is a key product for groundnuts in the food industry. European consumption is currently small, but has potential for growth. It is estimated that the average European consumes less than one tablespoon of peanut butter annually. In comparison, North Americans are estimated to consume around 1.5 kg of peanut butter per capita.
Growth has been reported in the largest European peanut butter market, the Netherlands. In the Netherlands peanut butter is a common bread spread. Some of the leading producers are Calvé (Unilever) and Intersnack.
In the United Kingdom, peanut butter sales rose by 13% in 2015 due to its rebranding as a health product. The British company Duerr’s has consolidated its position as the main peanut butter producer.
Groundnuts are gaining ground in new product launches
Europe shows a growing number of food products containing groundnuts. Snacks still dominate the market, at 45%. Chocolate and confectionery is 14% of the market and bakery 11%. However, groundnuts are also used in other new applications. The product is valued for its health aspect, supported by recent studies highlighting peanuts’ benefits and new insights into peanut allergy. Additionally, the taste, protein content and texture of peanuts are appealing to consumers.
Other applications with smaller market shares are these newer products, such as ready-to-serve meals containing groundnuts and groundnut milk. Examples are:
Peanut Hottie drinkable groundnut powder (United Kingdom)
Ready-to-serve meals like Plus Bami Goreng with Satay Ajam (Netherlands)
Magnum Double Peanut Butter ice cream
Peanut milk products from the Asia-Pacific region could also enter the European market, as non-dairy milk alternatives grow.
4 . What requirements should groundnuts comply with to be allowed on the European market?
Buyers in the European Union have strict requirements for groundnuts. You will only be able to successfully market your product in Europe if you comply with these requirements. See our study on buyer requirements for oilseeds for a detailed analysis of these requirements.
These requirements are particularly important for groundnuts:
If you want to export groundnuts to Europe, your product cannot contain harmful pathogens (such as microbiological activity, aflatoxin and pesticide residues) exceeding standardised tolerances levels. Maximum levels allowed are set in European legislation. If you do not comply with this legislation, you will not be able to sell your product to European buyers.
In Europe, aflatoxin restrictions are particularly tight and are often reported as a problem for groundnut importers.
Another point of attention concerns pesticide residues, which were recently brought to light due to changes made by European authorities to the methodology for determining propiconazole residues in groundnuts.
European buyers may require quality management system certification, especially when the groundnuts are destined for the food manufacturing industry. HACCP is likely to be a minimum standard required. Some buyers will also expect you to have certificates such as IFS or BRC.
Corporate responsibility and sustainability are growing issues within the oilseed sector. Groundnuts do not have a particularly negative profile like other products such as soya. However, adopting codes of conduct or sustainability policies related to the environmental and social impacts of your company can provide you with a competitive advantage.
Quality aspects such as size, uniformity, taste, colour, ease of skin removal (blanchability), shelf-life and oil content are considered important by the food industry. These factors will vary per application; for example, peanut butter requires Runner-type peanuts with a high oil content and low moisture content
Groundnuts should be free from sand, stalk, plant debris and other foreign materials.
To enter the European market, your product must contain labels in English (unless otherwise specified by your buyer). This should include the following information:
Product name and grade
Manufacturer’s lot or batch code
A declaration that the product is destined for human consumption
Name and address of exporter
Product’s country of origin
Shelf-life: Best-before date/use-by date
Net weight/volume in metric units
Recommended storage conditions
Organic (if relevant): Name/certificate number of the certifying body.
Groundnuts are transported both shelled and in shell. A wide range of packaging options are available:
Unshelled peanuts are most commonly packaged in jute bags in quantities of 25 - 30 kg (50 - 60 kg when shelled).
They can also be packaged in cartons.
Big bags or bins are becoming more and more significant in the sector.
In-shell groundnuts are also packaged in sacks and cartons.
Blanched peanut kernels are frequently packaged in vacuum packs for shelf-life preservation.
Requirements for niche markets
Organic certification for food manufacturing and crushing industries will only be interesting in niche segments. It is an interesting opportunity for groundnuts if the absence of chemicals (especially pesticides) can be certified throughout the supply chain. As an exporter of organic groundnuts, you can sell your product to specialised importers. These importers can often offer higher prices for your organic-certified product. The presence of chemicals of any sort is not tolerated in organic-certified products.
Fair trade certification is not widely relevant for groundnuts destined for the food manufacturing or crushing industry. However, it might be more interesting in certain niche segments for high-end snacks.
Within the food manufacturing industry, groundnuts are used as an ingredient in final food products such as peanut butter, chocolate and other confectionery, baked goods and sauces. Most large industries source directly from developing country exporters.
Processing industry (oil-crushing)
Around 50% of the world’s groundnut production is crushed into groundnut oil. This oil is used for cooking or as an ingredient in various food products, as explained in our study on groundnut oil.
The crushing industry for groundnuts in Europe is relatively small, concentrated around the Netherlands, Greece and Italy. Demand from the crushing industry amounted to around 34,000 tonnes in 2015.
Europe imported around 65,000 tonnes of groundnut oil directly from developing countries in 2015, mainly from Senegal, Argentina and Brazil.
Retailers and food service (direct consumption)
This market refers to the market segment which is directly accessible to end consumers as an edible nut (in retail packaging) in supermarkets, specialist shops and niche retailers (for example, organic supermarkets and health shops). This segment is further explained in our study on groundnuts within the edible nut sector.
Accessing trade channels according to your situation
A large proportion of the groundnuts destined to Europe come in through the port of Rotterdam.
As an exporter of bulk groundnuts, you can sell your groundnuts to a European trader or to the processing industry. Note, however, that the role of traders is diminishing within the groundnut market and that the processing industry is becoming more important as a direct importer. If your groundnuts are processed in the country of origin, you can sell these directly to food manufacturers and packagers.
If you are dealing with smaller volumes or specialised groundnuts (e.g. organic-certified), then specialised importers could be a useful point of entry into the market.
5 . What are the market prices for groundnuts?
Figure 5 shows global prices for groundnuts sourced in the United States and Argentina. These are the two largest groundnut suppliers to Europe.
Groundnut prices from other origins either cannot be found in the sources consulted or are incomplete.
The United States and Argentina are the ‘price setting’ origins for the European market.
Argentinian groundnut prices have risen since the beginning of 2016 due to harvesting delays and a smaller-than-expected crop. This was after a period of declining prices at the end of 2015.
In the United States, prices in 2015 were kept at a fairly low level due to a surplus of supply over demand. The production for 2016 is expected to be the second-largest ever (after 2012) at 3.16 million tonnes. This is expected to keep prices stable. In 2012, the United States increased its groundnut production from 1.8 million to 3.4 million tonnes following a severe drought.
The role of China has affected supply-demand dynamics (and consequently prices) in recent years. The country’s growing consumption of groundnuts has outpaced domestic production, which is already the largest in the world, and mostly used for crushing activities. This has put increasing pressure on groundnut supplies worldwide and led to a tighter balance between supply and demand.