Changing price trends of Arecanuts

The high prices of arecanut in the last few years have given the impression that the prevailing prices are low. After a year or two of good fortune arecanut prices are declining. In the main producing areas of Kerala and Karnataka, the prices have registered a sharp fall. The threat of higher imports which is looming large over the arecanut plantations. Arecanut price, which was having around Rs.5, 000 a quintal from ’94 to ’96 saw an improvement in ‘96-97 to Rs. 5,947 a quintal. In ‘97-98, it increased to Rs. 6,387 a quintal. But it was in ‘98-99 that arecanut prices witnessed a major rise to Rs 8,116. In January this year prices touched Rs. 10,000 a quintal.

However, prices have registered a major fall from this peak levels in the subsequent months. By April the price has declined to Rs. 9,500 in the Kochi market. In May it touched Rs.8,800 in the Calicut market. Sources said that prices have declined further to Rs.7,800 a quintal in the Calicut market in the last week of May.

Arcanut growers in Kerala, Karnataka and Assam – the states that account for 80 % of the total domestic production – were getting a good price as a result of the good domestic demand.

However, the present fall in prices is mainly on account of the threat of imports. The import of arecanuts into the country increased from 545 tonnes in ‘94-95 to 5,091 tonnes the following year. By ‘96-97, imports had gone up to 9,565 tonnes which further increased to 10,823 tonnes in the next year. Through imports declined to 6,707 quent year the fear of imports is the main reason for the price fall, sources said..

Market Update