Arecanut prices are projected to rise above ₹400 per kg in the next months, as plantations report illnesses and consuming markets show signals of increased demand.
Patte Venugopal, a farmer from Dakshina Kannada district’s Puttur taluk, told that illnesses in plantations may affect agricultural productivity. While fruit rot disease is common in many growing areas, yellow leaf disease (YLD) is spreading. As a result, he believes the prospects of prices falling are slim.
Subrahmanya Bhat, a planter from Dakshina Kannada’s Bantwal taluk, predicted a 30-40% decline in production this year. Many farmers have tiny farms and do not have significant carry-forward stock. ‘Considering these reasons, I believe the price will not fall,’ he added.
Yellow leaf disease influence
Mahesh Puchhappady, General Secretary of the All India Areca Growers’ Association, stated that YLD affected around 16,000 hectares of agricultural area in 2015. It was previously restricted to a few villages in the Dakshina Kannada and Chikmagalur districts.
With new instances of YLD impacting growers, the illness may have spread to other parts of Karnataka and northern Kerala. In such a case, he believes the price would not fall below ₹400 per kg in the next few days.
For the moment, new stocks of white arecanut are trading at ₹450-475 per kg, while old stocks are dealing at ₹525-560 per kg. During the same period in 2021, new stock was quoted in the ₹400-425 a kilogram range, and around₹ 360-365 a kg in 2020.
(While growers consider the Ganesha festival to be the cut-off period for evaluating new and old stocks of white arecanut, Campco considers October 1 to be the cut-off period because the date of the celebration fluctuates each year.) Crops grown over the summer are classified as fresh stocks until September 30, and then as old stocks beginning October 1. After adequate processing, the ripe crop in plantations becomes the new stock.)
Puchhappady stated that more research on YLD is needed to discover solutions to preserve farmers’ interests. He believes Campco, through the Arecanut Research and Development Foundation (ARDF), should take the initiative in resolving this issue.
The Central Arecanut and Cocoa Marketing and Processing Cooperative (Campco) Ltd, President A Kishore Kumar Kodgi, stated that the Campco delegation recently met with Finance Minister Nirmala Sitharaman in Delhi and requested that at least 1% of GST collected from the sector be set aside for research purposes. According to him, the research might focus on the medical characteristics of arecanut as well as finding answers to ailments such as YLD.
With an average yearly production of 7 lakh tonnes, he estimates that this industry alone generates roughly ₹700 crore in GST revenue for the government.
High demand in North
In response to a question, he stated that there was strong demand in northern India’s consumption centers. ‘We are hopeful that it will continue in the future,’ he added.
Government policies have helped to keep imports under control, and the landing cost is nearly equal to the domestic price. This, he claims, is impeding imports.
Ravish Hegde, General Manager of TSS (Totagars’ Cooperative Sale Society) Ltd, stated that production and consumption growth are well-matched and that the ‘paan masala’ sector has grown by 15-18% year on year. He believes that factors like this will assist to keep pricing stable.