The Madras High Court has stayed an order issued by the Agricultural and Processed Food Products Authority (Apeda) to regulate export of groundnut and its products for controlling aflatoxin, a fungus that makes grains powdery.

The stay was issued after a Chennai-based exporter Agrocrops Exim Ltd moved the court against the order, charging Apeda colluding with the Indian Oilseed and Produce Export Promotion Council to favour the council members.

In a petition filed earlier this month, Agrocrops, which has won the best exporter award for groundnut exports from the Agricultural and Processed Food Products Export Development Authority (Apeda), said that the order was not in accordance with a notification issued by the Directorate General of Foreign Trade (DGFT).

The DGFT had asked groundnut exporters to register themselves with the Apeda.

But, Agrocrops said Apeda had incorporated rules that were specifically framed for exports to the European Union in 2010. A feature of the rules was that even units that shell groundnut have to be certified. This has been incorporated in the new regulation which, according to exporters, is not required for countries other than the European Union.

In particular, these regulations are of little consequence to countries in Asia such as China, the Philippines and Indonesia which have begun large buyers of Indian groundnut.

Agrocrops said that it was also wrong on the part of the Apeda to have nominated the exports council as an authority to permit exports.

The Chennai company argued that under the Export-Import law, the DGFT can appoint another officer to facilitate exports. In this case, the Apeda had been given the power to facilitate shipments. However, it had given powers the exporters’ council which was not in conformation with rules.

While Agrocrops has moved the High Court, already, exporters in the Saurashtra region of Gujarat have opposed the new regulations.

Their view is that it could increase the cost for exporters and most shelling units are ones with smaller capacity.

They have also charged the council with vested interests. They have alleged that since most of its members were exporting to Europe and as shipments to the region had dropped, the new regulation has come in to help its members.

However, the council has rejected the allegations, saying registration of shelling units will help them get subsidy from the Apeda for certification.

While staying the regulations, the Court has issued notices to the DGFT, the Apeda and the council.

According to exporters in Chennai, despite the stay order the custom authorities were not allowing exports. However, the Apeda notification has said that groundnut exports would not be allowed by Customs authorities unless the consignment had its certification from from April 1.

Meanwhile, Oil World, a trade journal, has said that the US would stand to benefit from the curbs on supplies from here due to the new regulation.

China, in particular, could turn to the US from India. While exports from the US could gain over 80 per cent, Indian shipments could drop to 2.4 lakh tonnes this year from 6.96 lakh tonnes last year.

Groundnut prices that were ruling around Rs 6,250 a quintal in Gujarat at the beginning of the year have dropped to Rs 5,500 currently.

(This article was published on February 13, 2013)
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