The Gambia's Agribusiness Services & Producers' Association (ASPA), which is the Inter- professional body vested with the Management of the Gambia Groundnut Sub-sector, in the Gambia, has in a Press release, pegged the farm-gate Groundnut Producer Price of D1O,450 (ten thousand four hundred and fifty Dalasi) about(US$325) dollars per metric tonne for the 2012/13 Groundnut Marketing Season.

According to ASPA, this year's producer price was arrived at using the officially recognised Producer Price Determination Mechanism, which takes into account the World Market Prices for Groundnut Products as well as parameters and ratios relevant to the domestic marketing system.

However, this reporter looked at the World Market Price in comparison to the farm gate price in the Gambia with a view to ascertain whether the price offered to Gambian farmers would cover the cost of production as well provide labour cost and litle profit for the time and effort in producing the nuts.

However, according to the website of the National Planning Commission, the estimated production for Gambia groundnut this year stands at 140,000 metric tons of groundnuts, which is higher than the last cropping season which was a failure by many standards.

According to a recent bloomberg report, quoting from Oil World website, World production of peanuts is forecast to slip 0.7 percent in 2011-12 after drought reduced the crop in the U.S. and Senegal, causing a shortfall that would require global demand rationing this season.

"The harvest of peanuts, or groundnuts, is forecast to decline to 24.8 million metric tons from 25 million tons, on top of "relatively low" carryover stocks", said the Hamburg-based oilseed researcher today in a report.

"A severe shortage of groundnuts has developed in recent months for both direct food use and crushing", Oil World wrote. "World demand will need to be rationed this season after growing steadily in recent years."

According to the Rotterdam, groundnut prices were "firm" at $2,800 (D89,880) Dalasis a tonne on the basis of cost, insurance and freight on Febuary 2, 2012 up from $1,580,or D50,718 Dalasis a tonne in January 2011, Oil World said.

U.S. prices for peanuts crushed to make cooking oil and used in Unilever's Skippy peanut butter and Mars Inc.'s Snickers bars, jumped 49 percent in the past 12 months to 33.7 cents per pound in the week ended Jan. 27, government data show. Peanut butter retail prices jumped 8.6 percent to $2.43 a pound in December from a month earlier, the highest in records dating to 1984, according to the US. Bureau of Labour Statistics.

Oil World informs that Peanut production in Senegal is forecast to slump to 450,000 tons in 2011-12 from 840,000 tons a year earlier, while the U.S. harvest is estimated at 1.24 million tons from 1.41 million tons the previous year.

India too is a groundnut producer and the forecast is expected to drop to 3.95 million tons from 4.09 million tons, according to Oil World. The country's exports of the oilseed will slide to 390,000 tons from 517,000 tons, it said.

China's groundnut harvest is estimated at 10.5 million tons, a little bit higher than the previous year of 10 million tons, while exports are forecast to gain to 310,000 tons from 307,000 tons in the season through October as domestic consumption climbs.

According to the Oil World, "In China, the rapid growth of groundnut demand has outpaced domestic production in recent years. "It took strong price signals from the world market to reverse the downtrend of Chinese exports in the last quarter of 2011."

Our neighbouring state of Senegal's peanut exports have always been restricted by the Government of Senegal (GOS) to support local processing. In the 1990s, this policy was liberalized to permit snack peanuts exports (raw, shelled/unshelled). Due to the huge peanut production in crop year 2009/10, the GOS issued Decree 2010-15 in January 13, 2010 to permit the export of all varieties of peanuts except seeds. This measure is intended to reduce the peanut surplus. In 2010, Senegal exported a total value of $1.3 million of groundnut compared to $93,000 in 2009 and $376,000 in 2008, United Kingdom being the main importer (86 percent). Since 2009/10, there has been a launch of revitalization of the groundnut sector for export market penetration that could lead to increase of farmer's revenue.

However, practice has shown that farmers in the Gambia would compare the price offered in Senegal and decide whether or not they would sell their nuts to the Gambian buyers.

It is interesting that despite the huge world market price of G/nuts, the Gambia could only increase this year's price by D1,150 (one thousand one hundred and fifty Dalasi)($35.82) dollars per metric tonne above last year's price.

Foroyaa will send a reporter to ASPA to explain what the World price means in terms of the Gambia.