Brazilian Peanut Exporters will Enjoy New Benefits

Published 2021년 5월 21일

Peanut exports have grown consistently over the past few years in Brazil. In 2020 a 38% increase in export sales was recorded, and for the 2021 export season, Brazilian authorities have set new export regulations that aim to increase the competitiveness of the Brazilian product. In March of 2021, The Ministry of Agriculture, Livestock, and Supply (Mapa) published a new Normative Instruction, which regulates the criteria and procedures for sanitary certification of exported peanuts. With this, certified exported companies will be able to export to the EU market through a certified system that will reduce bureaucracy and simplify health certification.

Growth of the Brazilian Peanut Industry

In 2020, Brazil exported raw and processed peanuts to 57 countries, accounting for 259 thousand tons of raw peanuts exported and 5 thousand tons of processed peanuts. The exported value for both was USD 329 million, of which USD 319 million corresponded to raw peanuts and USD 9.8 million for processing. These numbers represent a 38% increase in exports from the previous year (2019) for the Brazilian export industry. Since 2019, Brazil has been the 4th largest exporter of peanuts worldwide and recorded a 23% annual growth rate average in value during 2016-2020. Brazilian peanuts seem to be gaining more space in the international market due to the quality of grain production. However, there has been clear state support and promotion from MAPA and the Brazilian Association of the Chocolate, Peanut, and Candy Industry (ABICAP) to boost Brazilian exports into new markets.

Source: ITC Trade Map, Tridge

In terms of production, Brazil has been increasing its production capacity year by year. According to the USDA, Brazil ended the 2019/20 marketing year as the 14th largest producer of fresh peanuts in the world. The area planted with peanuts was 160.5 thousand hectares, with a productivity rate of 3,474 kg per hectare, for an approximate production of 550 thousand MT. The 2020/21 production forecast is set with a higher productivity rate of 3,487 kg per hectare with an estimated output of 560 thousand MT, which would represent a 1.78% increase from last season.

New System Certification for the EU

Since 2015, MAPA has developed a system for the qualification of exporters based on individualized monitoring of the batches produced and annual audits at the peanut industrial and storage units that are willing to invest in laboratories, internal control processes, and product processing. In 2020, 19% of exports of peanuts were destined for countries in the EU region, and considering the increase in competitiveness, quality of the Brazilian product, and demand from the EU, the Ministry estimates that exports to this block will represent 60% of the total exported by 2023. The industry estimation is based on the fact that if there is a product offer, Brazilian peanut exports will be increased by 50% in the next three years, especially to EU countries, which has the most restrictive criteria of health as an economic bloc quality for peanut imports.

The implementation of the new regulation reduces the bureaucracy and simplifies the health certification of the exported product for companies with a high level of compliance, which the Ministry estimates to be at least 90% of the exporting companies. It will also increase competitiveness in the export of peanuts to the EU market and will stimulate peanut cultivation in crop rotation with sugar canes. About 90% of the peanut production in Brazil is made in São in a system of rotation with sugar cane, the dominant crop in the area. The goal is to simplify the certification processes for agents that have a level of compliance above 90% in their production processes.

Outlook for the EU Market

Russia remains the leading destination for Brazil’s shelled peanut exports. In 2020, Russia dominated nearly 37% of Brazil’s shelled peanut exports, coming a long way from 2013 when it took up only 13% of exports. After Rusia, the second buyer for Brazilian peanuts is Algeria with 12.3% and then the Netherlands with 11%. The European market including the UK all together accounts for about 19%, which makes it the current second-biggest market for Brazil after Russia.

Source: ITC Trade Map, Tridge

Brazilian peanut exporters are optimistic for 2021, mainly regarding the recovery of the market as a whole. Even throughout the pandemic, markets with large purchasing power in Europe and the Middle East are still expected to continue purchasing peanuts. Exports in the 2020/2021 season are projected to be at 300 thousand MT, which indicates a slow growth rate from 2020, following a trend of increase over the past decade. According to ABICAP, by simplifying the export process to the EU, exporters aim to double their exports by 2023.

Sources: