Foreign Direct Investment in Blantyre, Malawi - Millennium Cities ...

5. Groundnuts Industry Analysis
Industry Overview
Groundnuts (also known as peanuts) have long been an important part of smallholder production in
Malawi. With annual exports of about 50,000 tons, groundnuts were a major export crop for Malawi until
the late 1980s. 124 Until that time, the Agricultural Development and Marketing Corporation (ADMARC)
of Malawi was the sole trader of groundnuts and was responsible for buying and selling the seed.
However, following the liberalization of Malawi’s agricultural markets, ADMARC ceased to keep
groundnut seed stocks. Consequently, farmers were forced to recycle their seeds for subsequent years
resulting in the deterioration of nut quality. 125 Although international prices remained somewhat
attractive, the export market collapsed between 1990 and 1999 due to quality concerns as a result of
changes in shape and plant hygiene as well as changes in demand. 126 Despite this decline in exports, the
crop remains popular and enjoys a strong internal market. Most recently, groundnuts have re-emerged as
an export crop due to an organized market through farmers associations such as the National Smallholder
Farmers’ Association of Malawi (NASFAM), which promotes and markets groundnut cultivation. 127
Global Market Landscape
In 2005, Malawi ranked 20th in world groundnut output, producing 161,162 tons valued at US$77.9
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million. Regional competitors include Nigeria, Sudan and Senegal. These regional players exceed
Malawi's production capacity level. The largest exporters of groundnuts include China, the US and India.
In the region, South Africa and Ghana exceed Malawi in groundnut exports.
Production in Malawi
The total area of groundnuts cultivated in Malawi has rapidly expanded over the past decade, from 71,586
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ha in 1996 to 200,000 ha in 2006. The central and southern areas, including Kasungu, Lilongwe,
Machinga and Blantyre, account for over 75 percent of the total area planted. 130 Total groundnut
production has significantly increased in recent years. 131 The national groundnut production was
estimated to have increased from 71,586 tons during the period of 1996 – 1997 to 263,492 tons in 2006 –
2007. 132 In 2004, Malawi exported 8,329 tons of shelled groundnuts, valued at US$4,109,000, making it
the 17 th largest exporter in the world by value. 133
124 Toomey, David C., Patricia Aust Sterns, and Charles Jumbe (2001). The Impact of Improved Grades and Standards on the
Export Potential of Targeted Commodities in Malawi PFID-F&V Report, (East Lansing, MI: Michigan State University and
United States Agency for International Development).
125 Ibid.
126 USAID (November 28, 2006). USAID’s Activities on Agriculture and Food Security in Malawi (Draft)..
127 Ministry of Agriculture and Food Security (December 20, 2007). The Agricultural Development Programme - Malawi’s
prioritised and harmonised Agricultural Development Agenda: 2008-2012 (Final Draft), (Lilongwe: Government of Malawi).
128 FAO Statistics. Major Food and Agricultural Commodities and Producers.
http://www.fao.org/es/ess/top/country.html;jsessionid=63FA6E23D632AB87AEBE22F5D26A29E5.
129 .Development Associates, Inc (January 2003). USAID/Malawi’s SO1: Increased Agricultural Incomes on a Per Capita Basis –
1993 to 2001.
130 Malawi Investment Promotion Agency (2007). Investor’s Guide to Malawi 2007.
131 Ibid.
132 Ministry of Economic Planning and Development (2007). Annual Economic Report 2007 (Lilongwe: Government of Malawi).
133 FAO Statistics. Key Statistics of Food and Agriculture External Trade. http://www.fao.org/ES/ess/toptrade/trade.asp.
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