The volume decline of 8% in the India nuts market in 2012 was a poorer performance than the 2% CAGR decline of the review period. The drop in 2012 was mainly driven by falling production, subsequently resulting in spiralling prices and a fall in demand.
Peanuts was the worst performer in 2012, posting a total volume decline of 26%, with the category bearing the brunt of lower production as a result of insufficient rainfall and delayed planting. Rainfall in the state of Gujarat, which accounted for more than 40% of India's peanut production in 2011, was significantly lower than normal in 2012. This adversely impacted supply in the wholesale market in southwest Gujarat's Saurashtra region (the major producer of peanuts), with prices jumping by 74% in 2012 compared to 2011.
Nuts is expected to post a total volume CAGR of 5% over the forecast period, with sales set to approach 17 million tonnes by 2017. This forecast growth figure is significantly lower than the 10% CAGR predicted in last year's edition. The reason for this is continuing inflationary pressure which has resulted in consumers reducing their spending. As nuts are not considered a staple part of the Indian diet, consumers are willing to reduce their consumption. The government has also announced certain tough economic measures such as a hike in fuel prices. These measures could result in inflation continuing to remaining high over the forecast period.
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