Areca prices unlikely to drop below ₹400/kg over the next few months

Arecanut prices are expected to rule above ₹400 a kg over the next few months with plantations reporting diseases and the consuming markets showing signs of a pick-up in demand.

Patte Venugopal, a farmer from Puttur taluk of Dakshina Kannada district, told BusinessLine farmers expect diseases in the plantations to reduce the crop yield. While fruit rot disease is prevalent in many growing regions, yellow leaf disease (YLD) is gradually spreading. As a result , the chances of a decline in prices is low , he said.

Subrahmanya Bhat, a grower from Bantwal taluk of Dakshina Kannada, projected a 30-40 per cent drop in yield this year. There are many farmers with small holdings, who do not have much carry-forward stock. “Considering these factors, I feel the price may not go down,” he said.

YLD impact

General Secretary of the All India Areca Growers’ Association, Mahesh Puchhappady, said around 16,000 hectares of the growing area was affected by YLD in 2015. Ten years prior to that, it was limited to a few villages in Dakshina Kannada and Chikmagaluru districts.

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With more reports of YLD affecting growers, the disease could have spread to more regions in Karnataka and parts of northern Kerala as well. In such a situation, he said, the price may not decline below ₹400 a kg in the coming days.

At present, new stocks of white arecanut are trading at ₹450-475 a kg, and old stocks at ₹525-560 a kg. New stock were quoting in the range of ₹400-425 a kg during the same period in 2021, and around ₹360-365 a kg in 2020.

(Though growers treat the Ganesha festival as the cut-off period for determining stocks as new and old, Campco treats October 1 as the cut-off period for determining new and old stocks of white arecanut, as the date of the festival varies every year. Crops harvested until summer are treated as new stocks till September 30, and are treated as old stocks from October 1. The ripe crop in plantations now becomes the new stock after proper processing procedures.)

Puchhappady said there is a need for research on YLD to find solutions to protect the interests of farmers. He said Campco, through the Arecanut Research and Development Foundation (ARDF), should take the lead in finding a solution to this problem.

A Kishore Kumar Kodgi, President of the Central Arecanut and Cocoa Marketing and Processing Cooperative (Campco) Ltd, said the Campco delegation, which met Finance Minister Nirmala Sitharaman in Delhi recently, has requested her to earmark at least 1 per cent of GST collected from the sector for research activities. The research could focus on medicinal properties of arecanut and on finding solutions to diseases such as YLD, he said.

Considering an average annual production of 7 lakh tonnes, this sector alone contributes around ₹700 crore as GST revenue to the Government, he said.

Demand

To a query, he said there was good demand in consuming centres in northern India. “We are hopeful that it will continue in future also,” he said.

Government measures have helped control imports, and the landing cost is almost at par with the domestic price. This is hindering imports, he said.

Stating that production and consumption growth are well-matched, Ravish Hegde, General Manager of TSS (Totagars’ Cooperative Sale Society) Ltd, said the ‘paan masala’ sector has seen 15-18 per cent year-on-year growth. Factors like this will help in maintaining prices at the current level, he said.

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