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Arecanut growers have been asked not to resort to panic selling when the market opens after the countrywide lockdown comes to an end.
Mahesh Puchhappady, General Secretary of the All India Areca Growers’ Association, told BusinessLine that growers should not flood the market with the commodity after the Government lifts the lockdown. Any panic selling may lead to a crash in prices of the commodity.
Growers can release the commodity only to meet their immediate monetary requirements, he said.
Sources in Central Arecanut and Cocoa Marketing and Processing Cooperative (Campco) Ltd told BusinessLine that the cooperative had put in a massive effort to prevent prices from crashing before the imposition of the lockdown. Stocks of white arecanut had closed at ₹263-₹305 a kg and red arecanut at around ₹394 a kg at the time of lockdown.
Stating that there could be short-term panic in the market when it opens after the lockdown ends, they said panic selling is not good for growers.
Explaining the market scenario in the arecanut consuming markets in northern India, they said that though there is demand for the commodity in that market, traders there are not in a position to buy now from arecanut-producing centres because of their liquidity constraints.
There could be at least a 90-day impact on liquidity as their money has been held up in different stages of the market chain. Their inability to pay may also impact the arecanut cooperatives who sell them the commodity.
Expressing optimism that the market may go up again in 90 days once the corona virus outbreak comes under control, the sources said the North Indian market is in need of the commodity now. Both the legal and illegal import of the commodity has been controlled. Added to this, a crop shortage of around 28 per cent is observed due to various reasons.
All these situations augur well to boost the price of the commodity, provided farmers have the patience to keep the material for another 90 days without panic selling when the market opens.
If the growers start panic selling of the commodity, then some private traders may exploit the situation and spoil the market, they added.
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