Owing to higher alphatoxin, European buyers are not interested in the Indian hand peaked seeds and sourcing their requirements from other markets like the US.

Despite a bumper summer groundnut crop in the Gujarat and higher oil content, exports prospects for HPS seem bleak. The European traders -- the major importers -- have complained that seeds contain higher alphatoxin than the prescribed EU norms.

Exports to Indonesia, a major buyer, also fell drastically because of the financial crisis in that country. "In fact, Indian traders refrain from the exports to Indonesia," said Prem Das, commodity trader at Vishal Exports, a Rs 800 crore trading house based at Ahmedabad.

Indonesian imports for 1999 have been pegged at 50,000 tonne against the pre-crisis leval of 2,40,000 tonne. India isa dominant player in the Indonesian peanut market and had exported 126000 tonne HPS in 1997 but export fell to 23000 tonne in 1998, due to the sever economic crisis that gripped the region.

"Several traders were unable to fulfil their commitments and failed to lift the delivery. Having burnt their fingers in the HPS trade in the last year, exporters prefer to stay away from the Indonesian market," Das added.

According to industry analysts, Indonesia's domestic consumption may fall by over 15 per cent to around 9.70 lakh tonne, due to higher local prices. Prices rose to 6200 per KG Indonesian Rupiah from 5000 per KG in Jan 1998 and 2100 in 1997.

In 1998 total imports were only 50,000, a 80 per cent fall from previous year. Although the importers can still make a profit by importing the seeds at the current import prices of $550-580 per tonne C&F, they prefer to lend their money in the local banks, as interest rates are ruled at 35-40 per cent.

They also face difficulties in opening of letter of credit.Traders buy stock of two weeks to a month. Production is forcast to be around 7.60 lakh tonne, down five per cent of previous years eight lakh tonne, said traders.

In tandem with HPS , groundnut meal import also likely to drop to 20000 tonne from 58000 tonne in 1997.

This is largely because of highly reduced poultry feed production. It is worth noting that country is one of the largest exporter. Gujarat holds lion share in exports because of peculiar test of the seeds.

Bleak export prospects have dragged prices down. The prices for Gujarat origin GN kernel new winter crop is being quoted at Rs 27520 a tonne for 50-55 count. For the other counts prices quoted at Rs 26400 for 55-60, Rs 25400 for 60-70 and Rs 24400 for 80-90 respectively. All the prices are FOB Kandla for May delivery.

As far as crop is concerned, summer crop seen very good. State is expected to reap around three lakh tonne seeds. The oil content in the seed is considered as an above normal. New crop Arrivals have just started. Arrivalwill increase from the next fortnight, said traders.

Though the export demand is lower, consumer demand is likely to improve. According to a local oil miller, packers of Salted Groundnut are seen major local buyers and may lift the produce because of good quality. Salted Groundnut has been sold in the state in a retail pack. It's a very popular snack in the state and some traders have started export salted seeds in a small.