Arecanut prices touch a new high

Decline in production has resulted in huge demand for the agriculture produce

The prices of white arecanut had touched an all time low, just two years ago with less than Rs 35 a kg.

The prices of ‘hale adike’ (old stock called ‘chol’) stood at Rs 182 and ‘hosa adike’ (new arrivals called ‘chali’) at Rs 170 on Wednesday. Their earlier record was in 1999 when the prices touched Rs 172 a kg and Rs 165 a kg respectively, according to market sources.

According to Campco (Central Arecanut and Cocoa Marketing and Processing Co-operative Limited) Managing Director A S Bhat, many gutkha users started shifting to white arecanut after the government banned the sale of tobacco-based products in plastic sachets.

“As the ban hit production and consumption of gutkha, there is a huge demand for white arecanut, which is an alternative,” he said.

However, Campco Director and arecanut-grower Sanjeev Matandoor said, there is a decline in production of arecanut as people have been showing more interest in rubber cultivation (which is priced at Rs 240 a kg this year, up from Rs 70 last year).

“Decline in production coupled with intense labour problem, has resulted in a huge demand,” Sanjeev Matandoor said.

Ahmed Bawa, the vice president of Mangalore Merchants’ Association, which comprises arecanut traders, said that 60 per cent of arecanut is grown in Sirsi, Kumta, Sagar, Shimoga and Chitradurga districts (red variety) while only 40 per cent is grown in coastal region, including Vittal, Puttur and Sullia (white arecanut). “Given the ban pressure on gutkha, one has to wait and watch as to what will the red arecanut (main ingredient in gutkha) growers do next year,” he says and adds that there are a good number of growers who are yet to sell their produce hoping that the price of arecanut would touch Rs 200 a kg.

Incidentally, Bawa is into arecanut business since 1958 and was also a former member of Mangalore Agriculture Produce Marketing Committee (APMC).

No real rise

Puttur-based All India Areca Growers’ Association President Manchi Srinivasa Achar said that the prices of agriculture produces, including rice, coconut, spices and cashew, have gone up in recent past and arecanut is the last among these.

He does not agree that the prices have really gone up.

“If the prices of white arecanut was Rs 100 a kg in 2000, it should have doubled in 2010-11 as the prices of every commodity has doubled over the years,” he says.
“It may not be a surprise if it crosses Rs 200, as the number of consumers (approximately 20 crore ) is going up while the production is on the decline for various reasons, including intense labour shortage, pest attack and incessant rains.”

The price rise is of little help for small growers as many have already sold their produce, fearing dip in prices a few months ago.

“It will be profitable to small growers if the prices remain the same till October or November when the next crop is ready,” said Vishwanath Hebbar from Shivapura near Hebri, an areca grower, who sold all his produce when the price was Rs 100 a kg just a few months ago.