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There’s a need for increased
investments in the South African
groundnut industry
o
ver the past ten years, the South African population
showed positive growth. The middle-class has grown
and displayed changes in their diets; focussing on more
high protein foods such as chicken and meat, conse-
quently increasing the demand for feed (yellow maize
and soybeans).
However, these changes have not benefited the groundnut (peanuts)
industry. The South African edible groundnut consumption has been
decreasing over time, while the market for peanut butter has main-
tained a relatively stable consumption trend.
The significant decrease in edible groundnut consumption is due
to “consumer price sensitivity”, which is indicative of the degree to
which consumers’ behaviours are affected by the price of a product.
In this article, we briefly explore the groundnut market from a pro-
duction, consumption and export market perspective.
Production perspective
The past ten years has seen a decrease in South Africa’s groundnut
production (see
Graph 1
). However, the previous season showed a
slight recovery.
In 2014/2015 South Africa’s groundnut production amounted to
74 500 tons, which is 80% higher than the previous season. This
increase was due to an increase in area planted; from 46 900 hec-
tares to 52 125 hectares. However, this was still 35% lower than the
2004/2005 production, which was planted on 71 500 hectares.
In 2015/2016, the groundnut area planted increased by 11% year-on-
year, but production is set to fall by 11% year-on-year, due to current
drought conditions.
When compared to maize, soybeans and sunflower seed, groundnut
production was the only crop that showed a significant production
decrease in the past ten years. Out of all the abovementioned crops,
soybeans are the only crop that showed exceptional growth, owing
to the additional demand created by new crushing plants. Over this
same period groundnut yields, relative to other commodities, have
been decreasing (see
Graph 2
), with soybeans and sunflower seed
following a similar trend, though to a lesser extent. In contrast, maize
continues to show increasing yield gains
due to seed varieties, beneficial climatic
conditions and other production factors.
Consumption perspective
From 2004/2005 to 2015/2016, the South
African population grew by 16%, now es-
timated at 54 million people. This growth,
coupled with the increasing middle-class,
affected the demand for food and maize;
soybean and sunflower yields catered or
provided for the increasing domestic con-
sumption. However, the groundnut market
is experiencing the opposite.
Graph 3
illus-
trates South Africa’s groundnut consump-
tion against population growth.
In South Africa, groundnuts are mainly con-
sumed in two forms, as edible nuts as well
as processed peanut butter. The peanut
butter market consumption has been fairly
stable throughout the years, just below
24 000 tons per year. This market grew sig-
nificantly in 2014/2015, reaching 27 641 tons
WANDILE SIHLOBO,
economist, Industry Services, Grain SA
GRAIN MARKET
-overview
– 14 April 2015
ON FARM LEVEL
Mei 2015
40
Graph 1: Grain and oilseed production index.
Source: Grain SA (2015)