Some decisions by the Central Arecanut and Cocoa Marketing and Processing Cooperative (Campco) Ltd on arecanut purchase from growers after the demonetisation of ₹500 and ₹1,000 currency notes seem to have helped stabilise the market.
The price of the commodity has remained stable, though arrivals have come down.
Growers, who were getting around ₹250 a kg for new stocks of white arecanut prior to the demonetisation, were expecting a fall in the prices of the commodity post-demonetisation. This was because a major portion of the commodity is being traded by private operators. (Of around 7 lakh tonnes of arecanut production in the country, Campco procured 51,142 tonnes in 2015-16.)
Sources in Campco told BusinessLine that the decision to purchase arecanut to a maximum limit of ₹20,000 per member, per week (which was increased to ₹24,000 subsequently) and to retain the price at the pre-demonetisation level helped stabilise the market.
They said that some private operators tried to bring the market to a level of ₹210/kg for new stocks of white arecanut immediately after demonetisation. However, Campco decided to buy the commodity at the pre-demonetisation price in a bid to boost farmers’ confidence. This came as a blow to private traders, a majority of whom were evading tax, said a source in Campco.
Asked about the cap of ₹24,000 per member per week, they said the farmer can withdraw only ₹24,000 from the bank even if he had sold commodities worth ₹1 lakh. Had there not been a cap on selling, farmers would have resorted to panic selling and flooded the market.
This would have led to a drastic fall in the price of the commodity, they said.
The co-operative’s efforts in maintaining the pre-demonetisation price for the commodity has helped improve the confidence level of the growers, they said.
To a query on arrivals of white arecanut, they said that the co-operative is now getting 40 per cent of what was coming in before demonetisation. Fixing of the upper limit for buying could be a reason for this, they said, adding that this has helped in stabilising the market.
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.