The Hindu Business Line : Arecanut dealers expect arrivals to go up

After a long spell of rain, arecanut growers have started drying the new crop and the market would witness better arrivals in about a few weeks from now.

Adverse weather conditions and diseases have already affected production this year. Last year also, the picture was not different as the production was quite low.

Marketing

The large concentration of foreign arecanuts in the domestic market would bring more harm to the domestic production.

Usually, arecanut marketing becomes more vigorous during the festival season in the September-October period. As the low-priced foreign arecanut take over the market, the farmers do not get a reasonable price.

During Diwali , the demand shoots up in North India.

But since the foreign product is available at Rs 10-15 less than the domestic price, the North Indian buyers hesitate to purchase from the local market.

The arecanut reached here 10 years ago from Thailand, Indonesia, etc., were of inferior quality.

Recording the lowest price for the import consignments, the importers allegedly indulged in all sorts of practices, including large-scale evasion of duty, and this prompted the Director-General of Foreign Trade to fix tariff for arecanut two years ago. Following this, the unauthorised imports could be prevented to a great extent and the price in the domestic market was brought up to Rs, 100 a kg.

Since then, a group of importers succeeded in cancelling the tariff through the Court and brought the market under their control.

import

Another group is engaged in large-scale import of arecanut under the cover of India-Myanmar Trade Agreement. A major share of the arecanut arriving at the Kolkata port under the guise of sending it to Myanmar dealers is sold in the domestic market itself.

The duty levied by Myanmar to import from Thailand, Indonesia etc. is Rs 9.50 a kg while in India, the duty for imported arecanut works out to 108 per cent.

Now, the price has come down to Rs 58-67 as against Rs 80 a kg early in January this year. It is almost likely that prices may further to Rs 48-58 a kg . The prices which ruled Rs 56-59 at the beginning of the month in Kochi have, by now, hit a low of Rs 54-57.

In 2008, India produced 5.56 lakh tonnes. Of this, Karnataka’s share comes to 2.25 lakh tonnes. The remaining portion is shared by Kerala, Tamil Nadu , Andhra Pradesh, Asam, West Bengal etc. In Kerala, arecanut is cultivated mainly in Thrissur, Palakatt, Malappuram, Kozhikode, Kannur and Kazargod districts.

India has almost achieved self-sufficiency in arecanut production. The country requires only six lakh tonnes for its domestic consumption.The shortage of labourers, higher wages, widespread diseases and pests, the price crash of the produce are the present challenges to the arecanut plantations in Kerala.