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It is almost five years now since the arecanut market has been witnessing an upward trend, barring a few corrections.
One of the common grouses of arecanut cooperatives is that many farmers sell arecanuts to private traders when prices are good and approach cooperatives when prices fall.
A comparative analysis of purchase of arecanuts by Campco (Central Arecanut and Cocoa Marketing and Processing Cooperative) over the last few years correlates with the above trend.
In a paper presented at the international conference on ‘Future of arecanut’, organised by Arecanut Research and Development Foundation (in 2008), Vigneshwar Varmudy, agri-economist and professor at Vivekananda College in Puttur, gives an overview of the average price trend of arecanuts since 1956. The commodity, purchased at ₹2.90 a kg in 1956-57, touched the double-digit mark of ₹15.80 a kg in 1980-81.
After remaining below ₹100-a-kg for two decades, it crossed ₹100-a-kg mark in 1999-2000.
Peak of 1999 Interestingly Campco, which procured 28,692 tonnes of arecanut valued ₹282.45 crore in 1998-99, could purchase only around 23,575 tonnes valued at ₹309.29 crore in 1999-2000.
The average price of the white arecanut came down to ₹96-a-kg in 2000, and around ₹51-a-kg in 2001 and 2002. Campco’s purchase went up to 35,049 tonnes valued at ₹324 crore in 2000-01 and to 41,242 tonnes valued at ₹238 crore in 2001-02.
Subsequently, the average price of arecanut came below ₹100-a-kg and remained in that range for almost a decade. The purchase of arecanut by Campco increased significantly during that period.
After remaining below ₹100-a-kg mark for almost a decade, arecanut growers started witnessing an upward trend in the market in 2011. The old stock of white arecanut touched ₹130-a-kg in April 2011, ₹170-a-kg in June, and reached ₹200-a-kg in September.
Stable period Campco, which purchased 52,622 tonnes of arecanut valued at ₹548 crore in 2010-11, procured only 47,195 tonnes valued at ₹662 crore, from farmers in 2011-12. The price of white arecanut stabilised at around ₹190-250-a-kg in 2012 and 2013. This stabilisation in price helped bring higher quantity of arecanut to Campco again.
The cooperative purchased 50,021 tonnes valued at ₹745 crore in 2012-13 and 52,235 tonnes valued at ₹878 crore in 2013-14.
In 2014, white arecanut crossed another significant milestone, with farmers getting ₹300-a-kg for old stocks. In fact, the purchase quantity at Campco came down to 45,497 tonnes in 2014-15. However, the purchased arecanut was valued at ₹1,241 crore during that period.
Farmers with whom BusinessLine interacted said private traders offer at least ₹10-15 more for a kg than what cooperatives offer, when there is good demand. This incentivises them to sell it to private traders.
They agree both cooperatives and some private traders pay them immediately. Some private traders, who seek time to pay the extra amount over what was quoted in the market, cheat them by not paying it.
People active in the cooperative marketing said the quantity of arecanut traded by private traders is four-five times more than that being traded by cooperatives.
Though the cooperatives face pressure when there is a glut in the market, they have in-built mechanisms such as price fluctuation funds to manage such situations, they said.
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