Article by Pnut King

Expanding the Presence of Indian Groundnuts in Vietnam

Published on 01/19/2024 in Peanut Market News

The area used for groundnut cultivation is shrinking in Vietnam's northern and southern provinces primarily a result of lower prices compared to groundnut supplies from India and locals shifting to more profitable crops.

Nuts about India's groundnut market

• India is the world's second-largest producer of groundnuts.
• India is projected to crank out 10 million metric tonnes of groundnuts in 2023–24.
• Over 20% of the world's groundnuts are produced by India alone.
• With an export volume of 0.59 million metric tonnes in 2022, India is the world's second largest exporter of groundnuts.
• Indonesia, Vietnam, the Philippines, Malaysia, Thailand, and China are India's major export markets.

Table 1: Vietnam’s Peanut Production

The area used for groundnut cultivation is shrinking in Vietnam's northern and southern provinces primarily a result of lower prices compared to groundnut supplies from India and locals shifting to more profitable crops.

Groundnut Demand and Consumption

Total groundnut consumption in Vietnam is estimated to be around 0.56 Million metric tonnes in MY2022/23, climbing to 0.57 Million metric tonnes in MY2023/24, versus 0.39 Million metric tonnes production.

The majority of locally produced and imported Indian groundnuts are consumed in retail sales channels, food service, and the food processing industry (particularly in the snack industry) for both domestic and export consumption.

International Trade

• Due to the recovery of the services and tourism sectors, as well as the reopening of China's markets, Vietnam imported 0.34 Million metric tonnes of peanuts (in-shell basis) in MY2022/23, which is expected to rise to 0.36 Million metric tonnes in MY2023/24.
• In MY2023/24, Vietnam is projected to ship out 0.18 million metric tonnes of peanuts (in-shell basis).
• Vietnam's top export market, China, receives 63% of its total exports due to China's high consumption demand and close proximity.

Groundnut Production, Market Year Imports, Market Year Exports & Consumption in Vietnam

India - Vietnam’s largest Exporter of Groundnuts

It is a huge challenge to provide proteins to 98 million Vietnamese people throughout the year. Vietnamese buyers are drawn to the year-round availability of Indian groundnuts and its versatility. India alone supplied 0.16 Million metric tonnes of groundnuts in 2022-23 to vietnam making it the largest exporter of groundnut to vietnam.

A Groundnut partnership between India & Vietnam

India alone covers 46% of Vietnam's total groundnut imports. In 2022–23, India exported 0.16 Million metric tonnes of peanuts to Vietnam. Bold and TJ groundnuts are the most common types of groundnuts imported into Vietnam from India. In October 2023, the average price for the new 2023 Indian groundnut crop was 1320$ USD/MT for bold 40/50 and 1275$ USD/MT for TJ 50/60 FOB Indian port, under Vietnam quality specifications.

The popularity of Indian groundnuts in Vietnam has been fueled by a number of factors, including taste, affordability, quality, versatility, cultural exchange, import availability, trade agreements, the food processing industry, consumer preferences, and the diversification of peanut sources.