Groundnut

Marketing

• Most of the states groundnut arrivals are spread over all the four quarters of the marketing year beginning October.While in Andhra Pradesh, Karnataka, and Tamilnadu the market arrivals are 30 percent between October and December, in case of Gujarat, Madhya Pradesh, Maharashtra, Punjab and Uttar Pradesh these arrivals are more than 40 percent, and for all India we find that the market arrivals are distributed as fallows: 38.2 percent October to December, 28.1 percent January to March, 23.2 percent April to June, and 10.5 percent July to September.
• The reason behind this is that the small farmers, who are not capable of holding the produce and needing cash as soon as possible, bring their produce to the market immediately.
• The big farmers are not that in immediate need of cash, hold their produce with them and sell when the price goes up.
• Besides, some rich farmers buy the produce from small farmers, who are not capable of holding the produce and needing cash as soon as possible, bring their produce to the market immediately.
• It has been observed that almost the entire function of storage of groundnut pods for sustaining the crushing operation is undertaken by the farmers.
• Although there are day-to-day fluctuations in oil and oilseed prices, average monthly prices of both oil and oil seed display an increasing trend as the marketing year progresses.

• The small part of groundnut oil routed through refineries mainly goes through brokers.
• The channel is refineries-Whole-salers-retailers-consumers.
• The bulk of the oil, which is only filtered, goes through the brokers-wholesalers-retailers-consumers for sale within the state.
• For outstation sales, the channel is broker-commission agent-wholesalers-retailers-consumers.

• Brokers arrange the business between buyers and sellers either through commission agents or on their own.

• The major portion of oil is sold through the commission agent. Mostly all business outside the state is done through the commission agent.
• Commission agents purchase oil from the millers.
• The marketing costs including commission, sales tax, packing, etc., are borne by the miller.
• The commission agents arrange transport and other facilities for delivering the oil to a wholesaler (outstation) either by rail or by road.

• The wholesaler buys groundnut oil either directly from the miller or through a commission agent or a broker, and in turn sells to another intermediary or to the final user.
• Most of the wholesalers have their own retail outlets and do multiple functions, that is, wholesaling as well as retailing.
• In wholesaling as well as bulk retailing business, they arrange delivery to the consumers door at their cost.
• Normally, a wholesaler never keeps stock for a long time because in the oil business rotation of money is more remunerative than stocking.

• The retailers usually deal with a variety of household and consumer goods.
• They buy a small quantity .
• They keep the stock of not only one brand but also many brands, and in large number of cases.
• Oil is sold in loose form. Maximum sales of oil are between December and March.

• After oil is extracted, the oil cake goes to a solvent extraction unit either directly or through a broker.
• The major portion is handled by brokers.
• A major portion of deoiled cake is exported.
• Two channels operate in the domestic market for deoiled cake.
• Producer to final user through broker.
• Producer through broker to wholesaler to retailer to the final user.

• 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 market-surplus of the groundnut arrives in the markets.
• About 70-80% of the marketable surplus of groundnut pods is taken by the farmers personally to the market.
• The disposal of the produce, either at the village or at the market is, however, often closely connected with indebtedness.
• When the produce is sold to the creditors in the village or in the local assembling market, the prices paid to farmers are much lower then the regulated market rates.
• The sales in villages are invariably 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 decorticating establishments play a vary important role in the assembling of groundnuts, functioning in the triple role of processors, commission agents and wholesale merchants.
• The sellers have to pay tolls, taxes, commission, labour wages, weighments charges and deduction for charity.
• The growers can secure maximum value for their produce in the regulated markets.
• The regulated markets have been organized only in some of the main groundnut-producing areas and the number of such regulated markets and the quantity of produce handled by them is grossly inadequate.
• The methods of sale generally adopted are (a) the cover system, (b) the open system and (c) the auction system.
• There is a great diversity in the use of weights and measures in the groundnut trade.
• The pods and kernels are sometimes sold by measure.
• The main source of farmer's finance is the village merchant who gives advances in small amounts for cultivation operations and other expenses.
• Wholesale merchants and owners of shelling (decorticating) establishments advance money to the village merchants and in a few cases to the farmers in the nearby villages.
• There is intense speculative trade in groundnut and the prices fluctuate day by day and so the farmers are reluctant to invest in inputs for production of groundnut to avoid risks.
• The quality of Indian Kernels is considered low due to higher percentage of free fatty acids.
• Free fatty acids tend to accumulate during storage and movement.
• The practice of wetting the pods before decortication or shelling acelerates the development of free fatty acids than fully-developed kernels.
• Free fatty acid content can be reduced by harvesting mature nuts, drying the produce properly, careful decortification to avoid breakages and splits, better storage and avoiding unnecessary handling.
• In the internal trade the quality of pods and kernels is judged by a visual examination except in contract sales when the proportion of damaged kernels, nooks, brokens and splits, percentage of foreign matter and moisture content is determined
• Groundnuts are generally marketed under a number of trade names in the country but they are generally grouped into 4 main commercial types viz., Bold, Khandesh, Coromandel and Red Natal.
• The ISI has prescribed certain grades for groundnuts (kernels for oil milling and handpicked selections) produced and marketed in the country.
• These standards are based on the trade practices followed in the country in respect of the types and grades.

• There is a export for edible kernels which are styled Hand-Picked Selected (HPS).
• The HPS with extra bold size of kernels are exported to Eurpoean countries and fetches about three times the price of ordinary groundnut kernels.
• There is considerable scope for expansion of this trade.
• Farmers should take advantage of this and grow bold-seeded varieties especially under irrigation.
• These kernels are used in bakery and confectionery industry and also directly for edible purposes as fried and salted nuts.
• It is necessary that groundnut growers cooperatives are organized in all groundnut growing areas to help the farmers in pooling and marketing their produce profitably.
• The cooperatives can make arrangements to produce good seed and supply, provide inputs and advances credit for cultivation charges.
• These cooperatives can also have their own decorticators, oil mills and other processing units.
• The state level federations have been set up in Gujarat, Andhra Pradesh and Tamil Nadu for groundnut.

• Bulk of the groundnut is sold by the farmers as pods and small percentage as kernels.
• Shelling of the pods is done at intermediate stages as the produce reaches the millers and exporters in the form of kernels.
• Shelling reduces volume and transport charges but it is disadvantageous to market the kernels as they easily and quickly undergo deterioration and spoilage.
• Grading of groundnut is a prerequisite before mechanical shelling to keep the percentage of kernel breakage to a minimum.
• Better prices are also obtained in the market for graded pods.
• When groundnut is to be sown ,women labourers are employed for breaking the pods and taking out the kernels .
• In doing so, the testa of the kernel also get separated to a considerable extent making it useless for sowing ,because such damaged kernels will not germinate . Groundnut decorticators ,there fore ,have been designed.
• Two types of decorticators (shellers) are in use viz., the rotary and the oscillating types. Among the rotary types, there are both hand-and power-operated ones. About 80-100 kg of pods can be shelled in an hour with the ordinary hand-operated decorticator. There are improved types which can shell 125 kg pods per hour. The percentage of brokens in this type of decorticator is lower.
• The power-operated decorticators are of 2 types viz., the grate and beater types. The grate type is preferable as the percentage of broken kernels is less in it. As the owners of decorticating establishments charge for every unit bag of groundnut pods shelled, they aim at maximum out-turn per hour and so they run the machine at high speed unmindful of the breakages of kernels in this process. Precautions have to be taken to reduce the splits and brokens in kernels in the process of shelling as large percentage of split and broken kernels reduces the quality and fetches lower price. Power-operated decorticators shell about-400-500 kg pods per hour.

• Groundnut is processed by the organised and unorganised traditional sectors. It is estimated that about one-seventh of the output is crushed by the unorganised sector.

• The ghanies are driven by bullocks and these are mostly used in rural areas.
• They vary in size and detail of construction but in all cases the principle of operation is the same: a pestle rotating in a mortar.
• Oil is extracted within the mortar as a result of friction caused by the revolving pestle.
• The capacity varies from 8kg to 25 kg per charge depending on the size of the mortar.
• It takes two to three hours to crush a charge and three to five charges can be handled in a day.
• Some of the imporved ghanies can crush a charge in less than one hour.
• Oil yield from ghanies is generally five percent less than that from expellers.

• Oil Mills are very similar to ghanies but are operated by power. The usual capacity of a mill is 10 to 15 kg per charge which is crushed in 20 to 30 minutes.
• An expeller consists of a flight of steel worms on a shaft revolving inside a steel cage.
• The worms are so arranged as to produce a gradually increasing pressure on seeds.
• Oil is expelled through perforation in the steel cage and the cake comes out from the opposite end.
• The expeller cake has an oil content of about 7 percent.

• In a solvent extraction plant oil bearing material is brought into contact with a solvent (hexane) to release the entrapped oil.
• To achieve complete extraction, the solvent is percolated several times.
• This process is extremely useful for oil cakes having very low oil content which cannot be extracted otherwise.

• The trade performs the functions of assembly, transportation, broking, and rarely, storage in moving the produce to the mills.
• Though marketing channels differ somewhat from state to state, by and large the following channels are in operation.
  1. Producer to village trader who in turn sells either directly to mills or indirectly through wholesalers or commission agents.
  2. Producer to commission agents to millers wither directly or through wholesalers.
  3. Producer to broker who sells to millers directly or some times through wholesalers.
  4. Producer to millers directly.
  5. Producer to cooperative society to cooperative oil mills.

• The village trader procures from the farmer at the farm itself.
• He need not bring the produce to the market.
• All the marketing costs are borne by the trader.
• Sometimes farmers get loans from these traders.
• The normal procedure of payment to the farmer is after the produce is sold in the market.
• These traders sometime directly sell the seeds to the miller and sometime through a commission agent who in turn sells to a wholesaler, or directly to millers.

• In 1970 India was main exporter of groundnut but by the bigining of 1980 it was taken by the contries like Argentina and China.
• In 1993-94 total export of H.P.S was 2.5lakh tones which reduced to 0.51lakh tones in 1994-95 wh are year.
• There is lot of uncertainity in export of groundnut products and by products.
• In 1977-78 nearly 5-56lakh tones groundnut products/by products none exported which reduced to 3.5tons in 1994-95.

• Uncertainity is Kharif production because of which we lost our credit in International market by notable to supply the required demand on time.
• The reduction in the level by Alatoxines by the developed countries.
• The groundnut prise was mare in domestic market than international market.
• The downfall of soviot union.