The lockdown has come as a blessing in disguise for arecanut growers in the coastal belt and parts of Malnad as the prices of “chali” (white arecanut) variety have shot up by 18 % to 20 % in the past one-and-half months, thanks to the negligible imports during the lockdown and opening up of consumer markets in Uttar Pradesh, Gujarat and parts of Maharashtra in phases.
This is contrary to the expectations that the prices might crash.
Arecanut trading came to a halt when the lockdown came into force after mid-March. Using the opportunity, some private traders attempted to bring the market down by lowering the prices, especially in rural areas. When there was an attempt to destabilise the market, the Central Arecanut and Cocoa Marketing and Processing Cooperative Ltd. (CAMPCO), Mangaluru, which had stopped procurement from farmers since the beginning of the lockdown, resumed the procurement from April 13. Later it increased the procurement prices in phases.
When resuming the procurement, the cooperative offered ₹250 a kg to “hosa adike” (new stocks) and ₹275 to “hale adike” (old stocks). Since then the prices of new stocks went up by 20% and the old stocks jumped by 18%. Now the cooperative offers ₹300 a kg to new stocks and ₹320 a kg to old stocks. The prices of new stocks were below ₹300 and that of old stocks were hovering at ₹300 during the pre-lockdown period.
M. Suresh Bhandary, Managing Director, CAMPCO, said that as the imports were negligible during the lockdown the consumer market in North India entirely depended on domestic supply. Opening of the markets in Uttar Pradesh in late April and in Saurasthra region in Gujarat and in some parts of Maharashtra in the latter half of May pushed the demand resulting in the jump in prices.
The managing director said that the domestic arrivals are not in huge quantity as the farmers are not releasing the produce. There is no glut in the market. Hence prices might remain stable.
But if imports from Indonesia, Malaysia and Thailand resumed from this month there could be stagnation in prices. As the prices are ruling around an average of ₹300 a kg now there are chances of imports resuming as the importers will not suffer loss even after selling the imported arecanut at ₹300 a kg in the domestic market.
A total of 40 per cent of the arecanut in circulation in the consumer market constituted the imported ones. “Yet we hope the prices might stabilise at ₹300 a kg.,” Mr. Bhandary said.
Mahesh Puchappady, general secretary, All India Areca Growers’ Association, Puttur, said that farmers should exercise restraint by not releasing the produce to the market in one go. A staggered release will help to maintain the stability.