Commodities

New arrivals of white arecanut surge to record, top ₹500 a kg

A J Vinayak Mangaluru | Updated on September 20, 2021

Prices double in the last 18 months on low arrivals, curbs on imports

Arecanut prices have been witnessing a steady growth over the past few months. New arrivals of white arecanut surged to a record high on Monday with the Central Arecanut and Cocoa Marketing and Processing Cooperative (Campco) Ltd offering a maximum of ₹500 a kg to the new stocks on Monday. It was buying old stocks of white arecanut at a maximum price of ₹515 a kg.

In fact, the price of new stocks of white arecanut doubled in the last 18 months. When the country witnessed the Covid-induced lockdown in April 2020, Campco had come forward to buy the new stocks of white arecanut at ₹250 a kg.

The cooperative had taken this decision at a time when there was no buyer for the commodity in the arecanut-consuming market. In addition to this, some private traders had resorted to bringing down the price to ₹150 a kg range then. Campco’s intervention in April 2020 helped in stabilising the market for white arecanut, and also helped growers to tide over the situation.

Terming ₹500 a kg to the new stocks of white arecanut as an all-time high price, Kishore Kumar Kodgi, President of Campco, told BusinessLine that the factors such as the total control by the government on the illegal import of arecanut and the thin arrivals of new stocks of white arecanut are leading this rally.

Assam curbs

The Assam government has been strictly implementing control measures to curb the illegal import of arecanut. This has helped in bringing down the import to a great extent. The country was importing around 2-3 lakh tonnes of arecanut a few years ago. That has now come down drastically.

“This factor also helped in creating demand for the arecanut in the market,” he said. Asked about the arrivals of the commodity in the market, he said growers are not releasing the new stocks of white arecanut in large quantities.

The arrivals have trickled down to 10-15 per cent of the usual arrivals. Most of the growers with small holdings have already sold the commodity, and only those growers with large and medium holdings having the capacity to hold the stock for long have it now.

Also read: Red arecanut prices see steep rally in a week

Stressing the need for arecanut cooperatives to increase their market share in arecanut market, he said, now nearly 75 per cent of the market is cornered by private traders. There is a need for arecanut cooperatives to increase their market share to at least 40 per cent. This will help ensure stability in the market.

He said the growers should sell their commodity to arecanut cooperatives or to those private traders who give them the bill and pay tax to the government. However, some growers fall prey to the trap of some private traders who offer them ₹10 a kg more. Such traders do not pay tax to the government and don’t even give bills to the growers.

Coops to the rescue

Quoting the example of the arecanut buying by Campco during the first lockdown, Kodgi said it was the cooperative sector that came to the rescue of growers whenever there was a crisis in the market.

Mahesh Puchhappady, General Secretary of All-India Areca Growers’ Association, told BusinessLine that there is not much stock of arecanut in the consuming centres in north India, and there is a strict control on illegal import of the commodity. “Even the growers do not have much stock. These factors are driving prices of new stocks of white arecanut,” he said.

Urging the growers to be cautious about the prices, he said, they should not aspire for too high prices for the commodity. A sudden influx of the commodity to the market may bring the prices down significantly. “There is a need for them to release the commodity in regular intervals to maintain stability in the market,” he said.

Published on September 20, 2021

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