Post lockdown, Arecanut prices see steady growth

A J Vinayak Updated on July 26, 2021

Higher demand coupled with curbs on illegal imports helps the sector.

The first lockdown due to Covid in 2020 and the developments associated with that seem to have played a key role in stabilising the prices of arecanut in the domestic market.

The price of white arecanut has seen more than 70 per cent growth during the 15 months starting from the first lockdown in 2020.

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When shut down entirely due to lockdown with no buyers, the Central Arecanut and Cocoa Marketing and Processing Cooperative (Campco) Ltd ventured into procurement on April 13, 2020. Then it fixed a base price of ₹250 a kg for new white variety ₹275 a kg for old stocks of white arecanut.

On Monday, Campco was buying the new white arecanut in the range of ₹400-450 a kg and old stocks around ₹500-520 a kg.

The price of red arecanut, which was in the range of around ₹370 a kg in May 2020, has been ruling at around ₹420-430 a kg now.

Factors such as the curbing of illegal import, reduction in the production during the past few years, and a strong demand for the commodity from north India are driving the price of the commodity.

Curbs on illegal import

SN Khandige, Vice-President of Campco, told BusinessLine that curbing of illegal import of arecanut by the Government has helped stabilise the market in the country. He said there is strict monitoring of the movement of the commodity along the borders in north-east to prevent the illegal import of arecanut into the country.

This led to the increase in the demand for the domestic arecanut in the consuming market, he said.

Agreeing with this, Mahesh Puchhappady, General Secretary of All India Arecanut Growers’ Association, said that the production has also come down in the arecanut-growing regions due to the factors such as fruit rot disease and tender nut dropping in the plantations. He said there may be around 30 per cent reduction in the production this year.

Patte Venugopal, a progressive farmer from Puttur taluk of Dakshina Kannada district, said the production of the commodity is not up to the expected level of farmers since the last three years. Widespread fruit rot disease in arecanut plantations two years ago led to the reduction in the production that year, he said, adding that the production was less last year also.

Added to this, there is not much stock of the commodity in the consuming markets in northern India. He felt these factors are the main reasons for the price stability in the arecanut market.

Demand for red arecanut

To a query on the price of red arecanut, which has not seen the same growth as that of white arecanut, Khandige said some of the ‘paan masala’ manufacturing units in the north had shut production due to Covid second wave resulting in lower demand, he said.

(Based on processing, arecanut is classified as white and red varieties. White arecanut is prepared by drying the ripe arecanut in the sun and dehusking it. Red arecanut is prepared by dehusking green arecanut, and then boiling and drying it. The old stocks of white arecanut command more price than the new stocks in the consuming market. While white arecanut is used to prepare ‘paan’, red variety is mainly used in ‘paan masala’.)

Published on July 26, 2021
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