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With another 10 days to go for implementation of the GST (goods and services tax) regime, arecanut stocks in the market have seen a decline on thin arrivals. At the same time, traders are liquidating existing stocks and not buying new ones.
Until June 19, around 907 tonnes of ‘rashi’ grade of red arecanut were traded in APMC markets in Karnataka. Whereas around 2,597 tonnes of ‘rashi’ grade were traded in the APMC markets in June 2016.
(Red arecanut is prepared by de-husking green arecanut, and then boiling and drying it.)
Around 473 tonnes of new stocks of white arecanut were traded in APMC markets till June 19 as against 1,541 tonnes in the whole of June 2016. The trading of old stocks of white arecanut in the APMC market, which had reached 615 tonnes in June 2016, stood at 402 tonnes till June 19. (White arecanut is prepared by drying the ripe arecanut in sun and removing the husk.)
No panicSuresh Bhandary, Managing Director of the Mangaluru-based Central Arecanut and Cocoa Marketing and Processing Cooperative (Campco) Ltd, told BusinessLine that farmers did not panic when the price came down to ₹360 a kg in the red arecanut market recently.
The price of red arecanut, which had reached a maximum of ₹550 a kg, had come down to ₹360 a kg last week. However, it picked up again to reach around ₹400.
He said farmers are aware of the fact that there is lack of availability of arecanut stocks in the market as traders are liquidating old stocks and making new purchases. Farmers are holding back stocks to sell them after implementation of GST.
Ravish Hegde, General Manager of the Sirsi-based Totagars’ Sales Society, said traders in the arecanut-consuming market are liquidating their stock in hand. Waiting for the implementation of GST they are not buying new stocks now, he said.
At present, arecanut attracts a Central Sales Tax of 2 per cent and local value-added tax of 5 per cent. Post-GST implementation, the rate will come down to 5 per cent.
Representatives from the cooperative sector felt that factors such as the existing stock liquidation by traders and thin arrivals of new stocks in the market would help improve the market after the implementation of GST on July 1.
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