Islamic Inspection Service - SIILHalal

For a few years now, investments are being made to improve quality. The result is rising exports to countries like Algeria, the second biggest destination.

Amid mammoth crops in Brazil, like sugar and beef, peanuts are growing in relevance when it comes to agribusiness sales to Arab countries. Brazil is the second biggest peanut producer and exporter in Latin America. Last year saw 466,000 tons shipped abroad, trailing only Argentina, whose annual output is around 1 million tons.

Algeria, the second biggest destination for peanuts from Brazil, took in 9,500 tons of raw product, with sales increasing by 18,200 tons in 2018 from 2017. The Arab country ranked ninth in processed peanut exports from Brazil last year. The numbers are from the Brazilian Cocoa, Chocolate, Peanut and Candy Manufacturers Association (ABICAB).

However, production underwent changes over the past decade. “Brazil was once a major producer of peanuts for oil-making purposes. What used to be expected of the grain then isn’t the same as now. Raw peanuts must be a good size, well-formed, with sanitary issues well worked out because of residue and chemicals,” explained São Paulo Agricultural Economics Institute (IEA) researcher Renata Martins.

Achieving this increment in product sales entailed a shift in focus for the industry. “What’s happening is since the 2000s, the culture changed as cooperatives and exporters grew stronger. Technologies were embraced throughout the production chain,” said Martins.

Production chain unity

The state of São Paulo’s home to over 90% of national peanut production, and the source of 97% of exports. Still, sugarcane is the start industry here. And this is where peanuts come in – or better yet, fit into cane crop rotation. “The availability of these areas hinges of the sugarcane production chain. The importance of peanuts lie not exactly in volume, but in the fact that it diversifies [the crops],” explained Martins.

The researcher told ANBA about the shifting of gears in the industry over the last few years. “What the numbers show is that the industry began to organize itself better, to have forums and discussions. In 2013, the Peanut Industry Chamber was created, in connection with the São Paulo Secretariat for Agriculture and Supply. The industry is organizing towards improving quality, and domestic and foreign market in the confectionery industry, which is quite traditional and is virtually completely based here in São Paulo,” Martins exemplified.

When it comes to agricultural production, innovations include new varieties of the plant that grow closer to the ground, making mechanized harvesting easier, and processing with artificial drying. “Peanuts are born underground. They get harvested in high humidity and must undergo a drying process before they can be stored. This step ensures quality. Temperature and moisture control became more and more widespread,” Martins said.

Exports and Algeria

Investments in quality grew in tandem with sales to Algeria. Between 2014 and 2018, peanut sales from Brazil to the Arab country increased by 26,600 tons. Revenue widened from USD 16 million in 2014 to USD 42.5 million in 2018.

“Arab markets as a whole are very important. I believe that [the pickup in exports] was mainly due to demand from those markets. Although it has the biggest territory in Africa, Algeria is usually an importer of agricultural products. Brazil has very competitive prices compared with other producing countries, like China, where output is very high, but so is domestic consumption. We, on the other hand, produce and export,” Abicab chairman Ubiracy Fonsêca told ANBA.

And how to ride out the demand and increase Brazil’s market share? “When it comes to the Arab countries, it will require canvassing the market to ascertain the extent to which it’s economically viable. Peanuts are more competitive, cost-wise. It will entail doing a study with the Arab Brazilian Chamber of Commerce. Morocco, Egypt and Tunisia are potential target countries,” explained Fonsêca.

Quality

For Martins of the IEA, a learning curve has enabled sales to go up. “Exports of the oil are still going up, but the market that pays the best is raw peanuts,” she explains. And this investment in quality has already become a prerequisite, Fonsêca believes. “Quality is an intrinsic need in whatever product you wish to sell, be it domestically or abroad,” pondered Fonsêca.

The plans when it comes to showcasing the results of this work include going overseas. “We are putting in great effort and encouraging our companies to join fairs in order to export. Dubai’s the place where the Arab world converges, so that’s where we’ve been going with our companies,” Abicab’s chairman said. The association is looking forward to Gulfood, for general foodstuffs, and Yummex, for sweets, chocolates and snacks, both in Dubai, UAE.

Fonsêca points out that good results are also being achieved in products including Japanese, sweet, salted peanuts, and peanut-added items likepé de moleque. “We have 10 to 12 peanut-related companies. They’re buying products and technology. And investing in packaging design,” he said.

Enova Foods is one of these enterprises which export processed peanut products. Right now, breaking into Arab countries is on its radar. “We have spoken with traders who have clients in Dubai and Doha [Qatar]. We have plans of speaking with the Arab Chamber in order to go on a mission and get in touch with a few specific clients. The plan involves becoming an Arab Chamber member. We aren’t yet, and we understand that it’s a key step in getting deals [in Arab countries],” explained Ricardo Britto Pereira, who handles exports for Enova.

Source: ANBA