[Domestic News] Introduction of Imported African Peanut

In recent years, China's import of peanuts from Africa has gradually increased, reaching over 80% in 2022, with Sudan and Senegal being the main import sources. Due to the short shipping period and early harvesting, Sudanese peanut kernels usually arrive earlier than those from Senegal, with the former peaking in March and April, and the latter in April and May.

The planting time for peanuts in Senegal and Sudan is similar to that in China for summer peanuts, with planting taking place in June and July, growth beginning in August, and Sudanese peanuts having a shorter growth period, starting to be harvested and put on the market in September, while those from Senegal begin to be harvested and put on the market in November. The main peanut-producing areas in Senegal are scattered in the middle and lower reaches of the Senegal River, while those in Sudan are mainly distributed at the intersection of the White Nile and Blue Nile, as well as in the central and southern regions.

In 2022, abundant rainfall in Senegal and Sudan led to increased peanut production in the 2022/2023 season. Senegal also canceled its export tax of 30 francs per kilogram at the beginning of 2022, which is expected to further increase exports. Under normal circumstances, the advantage of Senegalese and Sudanese peanuts lies in their high oil content, low moisture content, and low price. Domestic peanut kernels have larger specifications, higher particle integrity rates, and lower acid value and impurity content.

Ⅰ、The Status of Peanuts Imported from Africa in China

Since 2016, China's imports of peanuts from Africa have significantly increased, with the import proportion increasing from 1% in the past to 82% in 2022. In particular, imports from Senegal and Sudan reached a peak of 330,000 tons and 410,000 tons respectively in 2021, while imports from Ethiopia were relatively small, with the annual maximum import volume being only around 90,000 tons. Among them, the growth rate of peanut kernel imports from Sudan was the fastest. At first, it was less than Ethiopia and Senegal, but since 2020, Sudan has become the largest African country from which China imports peanuts.

Usually, the shipping time from Sudan port to China is around 30 days, while it takes around 50 days from Senegal to China. Despite being closer to the eastern part of the African continent, Sudan's peanuts are harvested a month earlier than Senegal's, which results in Sudan's peanut shipments arriving earlier at the port than those from Senegal. In late 2021 and early 2022, the COVID-19 pandemic caused logistics disruptions, resulting in delayed shipments of peanuts from both Sudan and Senegal. In other times, the peak period for Sudanese peanut arrivals at the port is from March to April, while the peak period for Senegal's peanut arrivals is from April to May.

Ⅱ.Supply and demand situation of peanuts in Senegal
2.1 Production of Peanuts in Senegal

Similar to summer peanuts in China, Senegal peanuts are harvested starting in June and finish by the end of July. Then, in August, they enter a growth period that often continues until the end of October. Harvesting and marketing start in November and continue until February of the following year.

According to official data from Senegal, the estimated peanut harvesting area for the 2021/22 season is 1.21 million hectares, an increase of 1.2% compared to the previous year. However, due to inadequate rainfall in some areas, especially in Tambacounda and Kolda, the estimated yield for the 2021/22 season will decrease by 7% to 1.68 million tons.

The Foreign Agricultural Service (FAS) of the United States Department of Agriculture predicts that the estimated peanut harvesting area for Senegal in the 2022/23 season will be 1.23 million hectares, an increase of 1.6% from the previous year. This is mainly due to the higher peanut prices, which encourage farmers to plant more. Due to the impact of the COVID-19 pandemic and the Ukraine/Russia war, international fertilizer prices have increased significantly. The Senegalese government has purchased enough fertilizer and provided planting subsidies to farmers. Despite the subsidies, compared to the previous year, the prices of nitrogen, phosphorus, potassium (NPK), and diammonium phosphate (DAP) fertilizers have risen by 63% to 83%. Farmers who cannot afford fertilizer may be more willing to plant crops that require less fertilizer. It is estimated that peanut consumption will increase by 7% in the 2022/23 season, reaching 1.8 million tons, due to adequate rainfall and lower pest pressure throughout the growing season.

Kaffrine, Kolda, Fatick, and Kaolack are the main peanut production areas in Senegal, accounting for 65% of the total production. The production areas are mainly distributed on both sides of the lower and middle reaches of the Senegal River in the southwest of Senegal.

According to official sources, in the 2021/22 season, peanut crushing capacity in Senegal is mainly concentrated in three companies, SONACOS (with a capacity of 79%, a state-owned company in Senegal), COPEOL (with a capacity of 15%), and SSII (with a capacity of 6%, an Indian company). The three companies purchased a total of 162,000 tons of peanuts for crushing in the 21/22 season.

FAS estimates that the consumption of peanuts in the 2021/22 season is expected to be 1.29 million tons, an increase of 7.5% compared to the previous year due to the increase in supply and production.

The estimated domestic peanut consumption in Senegal for the 2022/23 season is 1.35 million tons, a 4.6% increase from the previous year, due to the expected increase in supply. If local processors offer higher prices than international buyers, they may continue to purchase peanuts for crushing. According to the list of peanut processing companies collected this year, the total peanut crushing capacity in Senegal is about 350,000 tons/year, and the detailed crushing quantity every year depends on the amount purchased by the companies from farmers. However, in general, exporters offer better prices to farmers than processors.

In the 2021/22 season, all peanut exports must be sold at official collection points managed in cooperation with the National Professional Peanut Committee (CNIA) and the Ministry of Agriculture. On the same day, the minimum farmgate price was announced at 250 CFA francs ($0.43), the same as the previous year. In January 2022, Senegal cancelled the export tax of 30 CFA francs ($0.05) per kilogram due to the low density of peanut grains. Although the quality of peanuts is low, the suspension of the tax may encourage more importers to purchase peanuts.

On April 15, 2022, 19 exporters purchased about 151,000 tons of peanuts, of which 85% of the total production in the Kaolack and Dioubel regions were sold. As of April 15, 2022, about 533,000 tons of Senegal's peanut production had been sold, of which 258,000 tons were exported (including to China), 114,000 tons were used as seeds, and 162,000 tons were crushed into oil by local processing companies.

2.4 Senegal Peanut Supply and Demand Balance Table

The USDA, United States Department of Agriculture, estimates that in the 2022/23 season, Senegal's peanut production will only increase by 22,000 tons to 1.7 million tons, with exports increasing by 47,500 tons to 475,000 tons, domestic consumption increasing by 70,000 tons to 1.33 million tons, and stocks decreasing by 102,000 tons to 497,000 tons.

Meanwhile, the FAS, Foreign Agricultural Service of the USDA, predicts that in the 2022/23 season, Senegal's peanut production will increase by 120,000 tons to 1.8 million tons, with exports increasing by 60,000 tons to 460,000 tons, domestic consumption increasing by 60,000 tons to 1.35 million tons, and stocks decreasing by 1,000 tons to 564,000 tons.

Although the FAS predicts higher production and consumption than the USDA, exports are slightly lower. Overall, in the 2022/23 season, Senegal's peanut consumption and exports are expected to increase.

Ⅲ.Supply and demand situation of peanuts in Senegal
3.1 production of peanuts in Sudan

Just like the planting season for peanuts in Senegal, Sudanese peanuts are also planted from June to July, but their growth period only lasts for a short 8 months. They are usually harvested and brought to market starting from September, and the harvest may continue until the end of October.

The state with the largest consumption of hibiscus in Sudan is Al Jazirah, accounting for 26% of the total production. It is located in the central region where the White Nile and Blue Nile converge. The second largest producer is West Kurdufan, which accounts for 20% of the production and is located in the southern part of Sudan. Following that are North Kurdufan, South Darfur, and the northern region, all of which have a production share of around 9%.

3.2 Sudan Peanut Equilibrium Table

The US Department of Agriculture estimates that the harvested area for peanuts in Sudan will be 3 million hectares in the 2022-2023 season, which is lower than the 3.94 million hectares harvested in the 2021-2022 season.

During the 2022 peanut growing season in Sudan, rainfall remained slightly above normal levels, and yields increased from 0.6 tons per hectare in 2021-2022 to 0.83 tons per hectare. This led to a total production increase of 145,000 tons to 2.5 million tons. Exports also saw a small increase to 500,000 tons, while total consumption decreased by 128,000 tons to 2 million tons, and stocks remained steady at 600,000 tons.

Ⅳ.Comparison of Quality between Imported African Peanut and Domestic Peanut

Ordinary imported peanut kernels from Sudan or Senegal generally have a high oil content, typically around 45%-48%, with some as high as 50-52%. The oil content of domestic peanut kernels is around 43%, and some higher quality varieties have an oil content of 44%-45%. However, the acid value of imported peanut kernels is higher than that of domestic ones. The acid value of imported Sudanese peanut kernels is 1.3 mgKOH/g, and that of imported Senegalese peanut kernels is 2.5 mgKOH/g. The impurity and mold rates of imported peanut kernels are slightly higher than those of domestic ones, but the moisture content of imported peanut kernels is lower, making them more suitable for oil pressing in oil factories.

However, in terms of specifications, imported peanut kernels are relatively small, corresponding to the medium-sized peanut kernels with a sieve size of 50-60 internationally, which is equivalent to 5-6 sieves in China. Imported Sudanese peanut kernels are mainly refined, with a high intact particle rate compared to imported Senegalese peanut kernels, but overall, the intact particle rate of imported peanut kernels is slightly lower than that of domestic peanut kernels. Imported peanut kernels are also priced lower than domestic ones, making them popular among domestic oil factories.

Source: Hedge Research's Wealth No. 2023-02-09 20:09)[Click to view the original text]