Arecanut price slides sharply in Karnataka's Sirsi market; growers in trouble

Sirsi: The arecanut market, which had remained relatively stable for years, has now entered a phase of sudden decline, raising concern among growers preparing for the monsoon season.

In the Sirsi arecanut market, prices of all varieties have fallen by Rs 1,000 to Rs 2,000 per quintal within just one week. Traders and farmers say the decline is continuing daily, deepening uncertainty in the region's key agricultural economy.

Compared to May last year, demand from other Indian states has dropped by 35% to 40% this season. Around 30,000 quintals were supplied to other states during the same period last year, but market conditions have changed significantly this time.

Despite a shortage of supply in the arecanut, prices are falling instead of rising, leading to speculation among farmers whether this is a natural correction or a co-ordinated market strategy by trading groups.

Prices decline 

Farmers say the timing of the crash is particularly worrying.

In the Sirsi market, current prices show that Biligotu arecanut is trading between Rs 23,000 and Rs 36,599 per quintal, while Bette arecanut ranges from Rs 35,199 to Rs 49,169. Rashi arecanut is being sold between Rs 49,499 and Rs 52,989, and Chali arecanut between Rs 42,066 and Rs 46,639.

Last week, prices of all varieties were higher by about Rs 1,000 to Rs 2,000 per quintal.

May is ending, and farmers are busy preparing for the monsoon agricultural season. Large expenses are required for spraying Bordeaux mixture, purchasing fertilisers and paying labour wages. In addition, schools and colleges reopen in June, adding to the burden of education fees.

"At such a financially critical time, farmers are forced to sell arecanut to arrange funds. The price fall is causing severe economic stress. If prices fall further, maintaining plantations will become extremely difficult," said arecanut grower Ramakrishna Bhat.

The decline is being attributed in part to the illegal inflow of arecanut from countries like Myanmar and Indonesia into the domestic market.

"These foreign consignments are entering major markets such as Uttar Pradesh and Gujarat at nearly 20% lower prices than domestic produce. As a result, traders in those states are shifting away from local purchases, which is driving prices down," said TMS chief executive Vinay Hegde.

Co-operative societies, including TMS, TSS and Central Arecanut and Cocoa Marketing and Processing Co-operative Limited (CAMPCO), are continuing procurement to prevent a sharper fall, he added.

"We are trying to stabilise prices through regular buying. However, higher procurement prices are possible only when external demand improves. In this difficult situation, we are making every effort to support price stability," he said.