Senegal suspends peanut exports to protect its oil mills from Chinese competition

Faced with the stranglehold of Chinese traders on the groundnut sector and the supply difficulties encountered by local oil mills, the Senegalese authorities have decided to suspend groundnut seed exports until further notice.

Present for years in the country’s major groundnut-growing regions (Kaolack, Fatick, Louga, Diourbel…), where they scour the countryside in search of oilseeds, Chinese traders are more than ever the key players in the sector in Senegal. Capitalizing on farmers’ dissatisfaction with the renewal of the official purchase price – set at the beginning of the groundnut season at 210 CFA francs per kilogram – private operators from the Middle Kingdom quickly outbid each other to take the maximum available production. This situation is of course a source of happiness for farmers, who are much better paid for their labour, but it also causes distress to local oil producers, who now have a serious shortage of raw materials to run their factories. As a result, several of them have had to announce redundancies. Senegal’s National Oilseed Marketing Company (Sonacos), which harvested only 10,000 tonnes of seed (compared to an expected 250,000 tonnes), gave 1,050 layoff notices at its units in Diourbel, Kaolack and Ziguinchor, while the second largest oilseed company in the country, Compagnie d’exploitation des oléagineux (Copeol), terminated 200 seasonal contracts on 31 January. « These workers will lose their jobs due to a disastrous peanut collection campaign. We announced it and shouted it everywhere, but I have the impression that we were not heard, » said Samba Wane, the general secretary of the local branch of the National Union of Fatty Bodies at Copeol, quoted by the Senegalese news site Emedia.sn.

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Faced with this unprecedented context, the Ministry of Agriculture and Rural Equipment decided to suspend peanut seed exports, the objective being to « secure the reconstitution of seed capital and facilitate the supply of oil mills », justifies the circular letter of the Minister of Agriculture and Rural Equipment, Moussa Baldé, dated January 31, 2020. On a visit to Kolda on Sunday, February 2, the politician recalled that « exporters have injected more than 100 billion [CFA francs, 165 million dollars, Editor’s note] in the rural world this year » before becoming more specific, indicating that « the Chinese have allowed producers to sell a kg of peanuts at a price never reached ». It remains to be seen whether the official price set for the next few years will take into account this new balance of power in favour of producers.