Rising imports hit arecanut prices and demand.

KOCHI: Arecanut prices in India have been hit by the escalating imports, which have pushed down the demand for local varieties particularly the white arecanut.

With the lifting of restriction on import of arecanut, the flow of arecanuts from countries like Indonesia has gone up. The gutka and pan manufacturers are mixing the imported arecanuts with the superior domestic variety, which has led to a fall in the demand for the local production, the traders say. Karnataka, Kerala and Assam are the main producers of arecanut

The average domestic prices of arecanut have declined by Rs 10 per kg. The prices are ruling in the range of Rs 60 to 70 per kg despite this being the off-season. In Kerala where there is high wages and a scarcity of labour, this level of price is not remunerative, say the traders. The market is expecting the demand to pick up after the Ramzan fast period is over.

The import of arecanuts peaked in 2006-07 at 76,678 tonnes and then slumped to 21,299 tonnes in the following year with restrictions in place. The imports increased to 33,933 tonnes during the April-December period of 2008-09, according Dr M Tamilselvan, director of Directorate of Arecanut and Spices Development. It is expected to be substantially higher for the whole year.

The white variety of arecanut, which is used by pan vendors, is facing a dwindling demand. The sales of red variety, on the other hand, have not been affected with gutka manufactuerers buying it in large quantities. The sluggish offtake of white variety from major consuming states like UP and Bihar is worrying the traders. The demand from Gujarat, which is mostly for premium variety of arecanut, is also low this year, according to sources in The Central Arecanut and Cocoa Marketing and Processing Co-operative Ltd. (Campco)

With the demand for the red variety on the rise, there is a tendency to produce more such varieties. It is produced mainly in Karnataka, and Kerala in places like Shimoga, Chikmagalur, North Kanara, Wayanad etc.

The total production of arecanuts in the country touched 4.81 lakh tonnes in 2008-09. This together with the imports will take the availability to well over 5 lakh tonnes. The increase in production in the last few years has happened due to increase in area and production in Karnataka and West Bengal. Karnataka is the largest producer of arecanut with 2.24 lakh tonnes.