Business Viability and Market Linkages of Groundnut Value Added Products of Nagarkurnool FPO (Nagarkurnool) and Kashyam FPO (Wanaparthy) in Telangana

The study evaluates the business viability and market linkages of major groundnut value-added products, including cold-pressed groundnut oil, groundnut chikki, and raw groundnut kernels. Key financial metrics such as cost, revenue, profitability, and benefit-cost (B:C) ratio are analysed to determine economic feasibility. The findings indicate that Cold-Pressed Groundnut Oil has a modest B:C ratio of 1.05, highlighting the need for improved market linkages and operational efficiencies to enhance profitability. Groundnut Chikki, despite its low investment and seasonal production, shows potential with a B:C ratio of 1.06, but higher fixed costs and limited branding impact margins. Raw groundnut kernels, with a B:C ratio of 1.10, offer the highest profitability among alternatives. However, price volatility and market competition pose significant challenges. The SWOT analysis identifies strengths such as access to raw materials and government support, alongside weaknesses like limited processing infrastructure and branding. Market linkages through direct customer sales, wholesale distribution, and retail partnerships highlight the FPO’s role in supply chain integration. Strengthening branding, digital marketing, and collaborations can further enhance market reach. The study underscores the importance of strategic interventions to improve business viability and long-term sustainability for groundnut value-added products.

⓿ All three products —cold-pressed groundnut oil, groundnut chikki, and raw groundnut kernels—show positive Benefit-Cost (B:C) ratios, indicating viability. However, profitability remains constrained due to high raw material costs, operational expenses, and limited economies of scale.

⓿ Direct sales to consumers offer higher margins but are limited in scale, whereas wholesale and retail channels provide wider market access but reduce profit margins. Strengthening branding, expanding digital marketing, and forming partnerships can enhance market reach and profitability.

⓿ Limited processing facilities, financial constraints, and supply chain inefficiencies hinder FPO growth. Strategic investments in machinery, working capital, and branding, along with government and institutional support, can improve sustainability and competitiveness.