Structural Change Analysis of Groundnut Export Markets of India: Markov Chain Approach

Abstract

Background/Objectives: Groundnut or Peanut (Arachis hypogea) is the major oilseed of India. Groundnuts are essential protein crops in India and grown mostly under rain-fed conditions. India occupies first in terms of area and second position in terms of production. China is the largest producer as well as consumer of groundnut in the world with 166.24 lakh tonnes followed by India 68.57 lakh tonnes. India exports groundnut to more than 75 countries. The country has exported 6,64,436.00 MT of groundnuts to the world for the worth of |5,096.39 crores during the year 2019-20. This study is to analyze the structural change in the export of groundnut from India to different major import markets by using the Markov chain model. Methodology: Secondary data on groundnut yearly export data from India to other countries, were collected from 2009-10 to 2019-20. Markov chain analysis were used to obtain the results. Findings: The results have shown 'other countries' category, Malaysia, and Russia as stable destination for Indian groundnut exports. Other traditional importing countries such as Indonesia and Thailand countries are unstable (low retention probabilities) export share to these markets. Philippines, Socialist Republic of Vietnam, Ukraine, and United Arab Emirates are the most unstable markets among importing countries. Predicted export shares of groundnut to major importing countries revealed that the export share of Indian groundnut is predicted next four years in that highest to Indonesia as 33.18 per cent and lowest to United Arab Emirates as 1.35 per cent. Novelty: The study highlights the opportunity to invest in global trade of groundnut for the stakeholders involved in groundnut trade.