WCO Classification – Blanched Groundnuts

As reported earlier, the World Customs Organisation again discussed classification of blanched groundnuts at the 60th Session of the Harmonized System Committee (HSC) from 27th September to 6th October 2017.  Considering presentations and strong reservations from mayor exporting countries, amongst others the USA and Argentina, it has been reported that the WCO decided to reverse an earlier finding and place blanched groundnuts under the tariff classification code 12.02 where raw groundnuts are categorized.  This changes matters for importers in and exporters to South Africa as blanched groundnuts were traditionally not imported at the 10% tariff rate now applicable under raw classification.

 

 

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MRL List – August 2017

MRL List – Aug 2017The latest MRL list (see link) has been made available to the local groundnut industry.  Copies are also available on the website of the Department of Agriculture, Forests and Fisheries.

 

 

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2017/18 Production Season: Intentions to Plant

The South African Crop Estimates Committee on 26 October 2017, published the intentions to plant.  As at mid October, indications were at 65 500ha groundnuts, up 17% from the previous season’s final estimate.

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Applications for Financing of Research Projects in the Interest of the Oilseeds Industry: 2018/19 (New Applications)

The Oil and Protein Seeds Development Trust (OPDT) was registered on 18 September 1997. The main objective of the Trust is to promote and enhance the oilseeds industry in South Africa with particular reference to sunflower, soybeans, groundnuts and canola. This means that both Trust capital and income will be used solely for projects that are reconcilable with the aims of the Trust and in the interest of the oilseeds industry.

The Oilseeds Advisory Committee (OAC) consists of representatives of the main role-players in the industry and advises the Trust on projects that should be financed in the interest of the industry.  The Oilseeds Advisory Committee (OAC) hereby cordially invites you to submit research projects that are in the interest of the oilseeds industry. Of particular importance are the principle viewpoints formulated by the Oilseeds Advisory Committee (OAC) which will serve as framework when the Committee evaluates the project applications (see Addendum I for full particulars). You are kindly requested to take note of these viewpoints as applications falling outside this framework will not be considered by the Oilseeds Advisory Committee (OAC).

Deadline for Applications

Please note the following deadlines for project applications. Applications received after deadlines, will not be considered by the Oilseeds Advisory Committee (OAC).

  1. 1 June 2017 : Deadline for receiving applications – only Management summary.
  2. 1 August 2017 :Feedback by Oilseeds Advisory Committee (OAC) to applicants.
  • Project applicants who were unsuccessful will also be informed of the decision of the Oilseeds Advisory Committee (OAC).
  • Successful applicants will be requested to submit a full presentation and budget to the Oilseeds Advisory Committee (OAC).
  • After receiving the detailed applications, these will, where applicable, be referred for peer evaluation. In all cases, the Committee will honour the confidentiality of the peer evaluators.
  1. August : Where applicable, peer evaluators’ commentary will be referred to applicants for possible amendments to project proposals.
  2. 1 December 2017 : The Oilseeds Advisory Committee (OAC) provides applicants with feedback regarding finances approved by the Development Trust for the 2018/2019 financial year, not later than 1 December 2017.

Format of Presentation

Management summary

Your initial application (due date 1 June 2017) may be submitted in the form of a management summary. The following guidelines apply for compiling such a management summary:

  1. Aim and methodology : Introduction with a brief description of the aim of research or service project, followed by an exposition of methods to be used.
  2. Results envisaged : Refer to the results envisaged. Any additional information for the Oilseeds Advisory Committee (OAC)’s attention can be mentioned here.
  3. Value for the industry : Outline the value that such a project will have for the oilseeds industry. Make recommendations as to how research results can be used and how they can be applied in the industry. A financial evaluation of the proposed research will be useful. A proposed programme regarding the publication of results and implementation thereof can also be mentioned here.
  4. Limitations : Where applicable, mention the limitations which may be experienced that could have an effect on the project.
  5. Publication : Indicate how the result of the project will be made known, e.g. articles, congresses, farmers days, etc.
  6. Budget : Please attach a projected budget for each year of the expected duration of the project.
  7. Duration : Please indicate the expected duration of the project. It is not the policy to fund projects for longer than 3-4 years. Should a longer period be required, further applications can be submitted after the termination of the first phase.

Important : The management summary must not exceed four A4 pages per application.

Detailed motivated presentation

If the management summary submitted to the Oilseeds Advisory Committee (OAC) is considered favourably, it will be referred back to the researcher with a request for a detailed, motivated presentation. See above-mentioned deadlines in this regard. See also Addendum II for information to be included in the detailed presentation.

Relevant Budget Period

The relevant period of the budget is March 2018 to February 2019 or the first 12 months of the project. Please supply dates if not a calendar year.

Enquiries

If you have any inquiries you are welcome to contact the Chief Executive Officer, Gerhard Keun at telephone number +27 (0)11 234 3400/1 or email: oliesade@worldonline.co.za

We look forward to hearing from you.

Kind Regards,

Oilseeds Industry

PS:  Addendums referred to herein will be made available on request.

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Reclassification of Blanched Peanuts (WCO)

The following additional information were received on this topic:

“On the upfront, it was relatively quiet regarding this topic, but on the background, several actions have been taken already. As a member of the ENA – and in collaboration with FRUCOM, we have submitted a letter to the EU Commission. This document includes the contents of the previous working document, together with new additions, in a clearer format as requested by the Commission. This new format aims to help officials to find the relevant information and get a better and clearer understanding of the process, its purposes, and the science behind the differences between blanched and roasted peanuts. Several “reservations” were submitted after the September 2016 vote at the World Customs Organization (WCO) to classify Blanched Groundnuts under 20.08. It was expected that the matter would be addressed during the March 2017 meeting of the Committee, but it was again referred.

The next steps will be as follows:

  • May: the Commission will present the technical and legal arguments to the EU member states at the Trade Policy Committee; the Commission is considering whether to invite a technical expert to explain the blanching process and answer questions from members
  • June: the EU will present the technical and legal argumentation to the WCO
  • July: the technical and legal arguments will be presented and discussed at the WCO Council meeting”

 

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Update: International Supply Outlook

The following was compiled from various international reports:

USA: With no 2016 crop surplus business in the EU from this origin remains quiet. Buyers are either waiting for the new US crop or looking to other origins. US exporters are not eager to ship to EU either due to high (15 – 20%) aflatoxin rejection rate. Buyers think that prices may come down as long as quality or other issues does not occur in other origins. “The predicted carry out for 2017 crop of 887 000tons does not leave much room for crop problems and quality issues…in which case availability will be tight and prices will show this.”

Some interest are shown in the 2017 crop which are now being planted (25% completed by 7 May), but very little are on offer and even less are actually contracted. The major factors seems to be the Argentina crop – if the crop is smaller; delayed or have quality issues, export prices will remain as is or increase for the 2017 USA crop.

CHINA: Even though prices are now lower than previous years, very low demand from EU for Chinese product. No prices for the new crop discussed yet as the crop still to be planted.

“From the domestic side, the oil crushers have been reducing their buying prices constantly, resulting in lower prices for export material. We believe this situation will remain for the upcoming weeks and that not much will change. But as mentioned in our previous issue, we think prices will go up as per June/July when summer has come, increase on infestation, and causing exporters to collect the material and store them at cold storage etc. Costs that will definitely be reflected in the export prices.”

Due to drought in Northern China, planting is reportedly delayed by at least two weeks but farmers in Shandong are beginning planting since rainfall last week. China has decreased VAT for peanuts from 13% to 11%. The import duty remains at 15% (with the exception of Senegal) making the total import tax 26%.

ARGENTINA: An increase of up to 32% (in shell) production compared the previous season was reported. This increase was expected due to good growing conditions and technological development. But this was before heavy rainfall and flooding began during early April and now losses of between 15% and 20% are mentioned. During the weekend of 6-7 May, one to four inches of rain stopped harvesting again for a few days. At this time, about 60% has been dug and between 10 – 20% has been harvested (depending on different reports). Forecast predict more rain for later this week and weekend which may continue to negatively influence harvesting.

In light of the good crop predicted, buyers have not contracted much yet. Some shellers are still not in the market and pre-season sales are limited. Possible delays due to recent weather and waterlogged fields may delay deliveries which could put pressure on the spot market in weeks to come. This might have an influence on prices and other origins. According to some queries, there are many producers who claim that the situation is worse than “the one considered as very harmful last year”. The Argentine Peanut Chamber predicts that up to 40,000 to 50,000 hectares could be lost this year due to the excessive rains.

One of the reports state : “The first peanut production estimate by the Cordoba Grain Exchange of last month showed 795,500 MT of edible peanuts, looking at the figures above there is a 17% gap between estimation and reality. And we still have roughly 75% to be harvested, so our confidence that Argentina will have a great crop as expected slips away by the minute.

The European buyers are eager to receive their first shipments with most buyers would be only covered until the end of August 2017.” Confirmation of the hectares lost due to flooding and lack of soil will only be known by the end of June 2017.

“…Argentina is a key supplier to the West European market. Any further problems with the 2017 crop would result in a rapid rise of prices. There is still plenty of buying that has to be done by the Europeans. The good Brazilian crop will help some, but many cannot buy Brazilian peanuts. The US can hopefully help some with the 2017 crop but at higher prices, and let’s not forget that we have yet to plant that crop. So it goes without saying that European buyers are concerned and watching the weather carefully. Having said that, prices could also have some pressure should the weather cooperates.” There have been some reports that land rent for next year could be much higher than this year. Something to watch as it could obviously impact 2018 crop prices, but also potentially 2017 crop prices later in the season.

BRAZIL: Increased their prices due to the immediate availability of shipments that would compensate for the relative delay from the Argentina, however, this origin is not acceptable to all buyers (higher aflatoxin risk and poor selection quality) and other origins might be able to fill this need. For this reason Brazil also prefers to ship blanched product rather than raw.

“High temperatures of January and February, lower rainfall levels in the second half February offered good conditions for harvesting activities but affect a little the productivity. The normal rain levels last few weeks guarantee the conclusion of the crop with some risks of drought at the end but without risks of uninterrupted rains, low aflatoxin levels detected.”

The harvesting of the crop is basically completed with shellers reporting a good crop – both in terms of quantity and quality. Late rain though seem to have impacted about 40% of the crop, but in general yields are very good. The crop was originally expected at 550 000mt kernels, but could be now around 470 000mt.

SOUTH AFRICA: As reported before, the latest official production forecast (25th April 2017) kept the expected crop at 86 600mt. Harvesting is in progress and it will become clearer in coming weeks if this estimate are being realised, but reports are positive. According to some reports, there seems to be some role-players that feel that the estimate is slightly too high and could be 10 – 15% lower than projected.

In any case, compared to the disastrous 2016 crop, this still looks positive. One should however remember that this is not an above normal crop for South Africa. Due to drier weather and late rains the last two to three seasons, there was a decline in production, however, this is by no means a ‘large’ crop when compared to earlier crops, but could mean that we can return to our ‘normal’ exports this year.

Prices have come down somewhat from the initial offers made pre-season – surely also due to the weaker local currency – but depending on the situation in Argentina and the buyers’ need to cover possible delays or shortages, prices might follow the market.

Please feel free to contact me should you have any comments or enquiries.

Adri Botha

Chairperson:  SA Groundnut Forum

groundnutforum@opot.co.za

 

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3rd Estimate – 2017 Groundnut Crop (SA)

The 3rd estimate for the 2017 crop was published yesterday (25/04/2017) with no changes for groundnuts from the previous estimate a month ago:

3rd Production Estimate

 

 

 

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Feeding babies peanuts…

Research shows that exposing children to peanuts at an early age may limit their chances of developing peanut allergies later in their lives.  Follow this link for more information:

http://www.health24.com/Medical/Allergy/News/scientists-we-were-wrong-about-not-feeding-babies-peanuts-20170420

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Biocontrols Africa 2017

Biocontrols Africa FlyerBiocontrols Africa 2017

The first ever Biocontrols Africa Conference & Expo is coming to Cape Town on 12-13 July, 2017.  At this conference, organized by AgriBusiness Global™ Media in conjunction with South African Bioproducts Organisation (SABO), we’re gathering all the stakeholders – growers, agents and consultants, distributors and manufacturers – to partake in an engaging dialogue about the second generation of biocontrol and biostimulant products and practices. We’ll focus on real-world examples of how these products work, how they can be incorporated into traditional crop protection programs, and how they can achieve ROI on South African growing operations. We’ll even have a small exposition for producers to meet and greet with manufactures and distributors.

We have held conferences in South Africa previously, and this marks the first year in which we are solely dedicated to the agricultural bioproduct industry. During our in-country research and visits to farms, it was clearly evident that integrating biocontrols is key to the advancement of South African farmers.

Contact: Lauren Fitzgerald -Senior Manager, Digital Strategy & Audience Engagement, AgriBusiness Global (LFitzgerald@meistermedia.com)

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UPDATE: WCO CLASSIFICATION OF BLANCHED GROUNDNUTS

According to sources, several “reservations” were submitted after the September 2016 vote at the World Customs Organization to classify Blanched Groundnuts under 20.08. It was expected that the matter would be addressed during the March 2017 meeting of the Committee, but it was again referred – now to the July Council meeting. It is said that, given the technical nature of the issue, it will most probably automatically be sent back to Committee level which meets again in September 2017. Meanwhile, the American Peanut Council has been working with the European Snacks Association, FRUCOM, and others in Europe and elsewhere to have the decision reversed. This group believes that the blanched peanut definition basis on which the decision was made was flawed and they have been collecting information and data of their own to counter earlier findings by the member countries (USA, Japan and Korea) who independently tested blanched groundnuts. At the end of the day, the WCO will decide based on technical findings and not on economic impact of classification (although this will have a major impact for EU imports as was highlighted by the aforementioned group in earlier correspondence to the Council). It can be expected that locally SARS will continue to stand by their ruling that 20.08 is not to be used when declaring blanched imports, at least until a final outcome has been reached at the WCO.

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