The Hindu Business Line : Yield decline hots up arecanut market

Facts to chew
Prices now Rs 73-74 a kg against Rs 55-58 in January
Productivity lower on poor crop management Even red arecanut is commanding good price

Mangalore , March 15

Arecanut growers could not have asked for more. New stocks of white arecanut are ruling the roost in the market.

The prices of new stocks have registered a growth of around 26 per cent in the past 45 days.

The new stocks, which were trading in the range of Rs 55-Rs 58 a kg in January, are now trading at Rs 73 to Rs 74 at South Kanara Agriculturists Cooperative Marketing Society Ltd. The old stocks of white arecanut were commanding that price in January.

(The society decides the market for white arecanut. Major cooperatives, such as Central Arecanut and Cocoa Marketing and Processing Cooperative (Campco) Ltd and the Mangalore Agriculturists Souharda Sahakari, and private traders bid for the arecanut stocks in this society.) In the Mangalore market on Tuesday, the new stocks commanded a maximum price of Rs 74.34 a kg and old stocks Rs 80.62 a kg.

DECLINE IN YIELD

Market analysts say the fall in the production of arecanut during the year and clearance of old stocks in some of the major markets created demand for the new stocks of white arecanut.

Compared to the previous years, there has been a decline in the yield of arecanut this year. Disappointed by the crash in prices in the last few seasons, some growers did not pay attention to crop management.

This led to the decline in the crop yield. Added to this, red arecanut-producing districts such as Chitradurga and Davangere faced droughts in the last few seasons.

The stocks of red arecanut are also commanding a good price in the Shimoga and Sagar markets. Foreseeing this demand, some growers in Sirsi and Kumta areas of Uttara Kannada district shifted their attention from white arecanut to red arecanut.

This led to demand for white arecanut stocks in the market.

Major traders and cooperative societies have already cleared the old stocks of white arecanut in the market.

This is also considered as one of the reasons for new stocks of white arecanut commanding a good price in the market. However, some of the market insiders say these are not the only factors creating demand for the new stocks of white arecanut. "It is not exactly a consumption demand. Some major traders are buying big quantities of new stocks so that they can sell them for better prices in future," said a market insider on the condition of anonymity.

Between red & white

Arecanuts are classified as red and white based on the method of processing.

In the case of red arecanut, growers pluck the tender arecanuts from the tree, peel the cover and cut them into pieces and boil them.

After this, the commodity is dried in sunlight for some days before it is sold in the market.

Red arecanut is mainly used as an ingredient in `gutkha'. Sagar, Shimoga, Bheemasamudra and Chennagiri in Karnataka are the major markets for red arecanut. In white arecanut, growers pluck the ripened arecanuts from the tree, dry them in the sunlight for some days and peel their cover before selling in the market.

This arecanut is used mainly in the preparation of `pan'.