The sudden rise and fall in prices of arecanut within a span of one month has forced the recently-constituted Karnataka Agriculture Price Commission to take note of fluctuations in the market.
Following its first meeting in Bangalore on Monday, the commission directed the Horticulture Department to convene a stakeholders meeting in Shimoga to understand the reasons for price volatility and find ways to regulate it.
In ShimogaADVERTISEMENT
The price of red varieties of arecanut, which was around Rs. 410 a kg in the first week of June in Shimoga, had more than doubled to Rs. 830 a kg in the first week of July. The prices have now suddenly gone down to Rs. 610 a kg.
In Dakshina KannadaThe price of white arecanut in Dakshina Kannada continued to increase. The price of ‘chol’ variety (old stocks harvested last year), which was between Rs. 180 to Rs. 185 a kg, jumped to Rs. 295 to Rs. 315 on Tuesday. The prices of fresh harvest went up from Rs. 150 to Rs. 160 a kg to Rs. 290 to Rs. 310.
“Farmers getting high price is good news, but fluctuations are neither good for economy nor for farmers,” said T.N. Prakash Kammaradi, chairperson of the commission.
He said that while transactions at the primary level of arecanut trade (at the APMC level) is “open and transparent” despite some systemic problems, it is the secondary and tertiary levels of trade that are opaque.
“Unless we understand the manipulations that happen there, we cannot understand or control prices,” he said.
ReasonsCentral Arecanut and Cocoa Marketing and Processing Cooperative Ltd. attributed the market trend in white arecanut to crop loss owing to fruit rot disease (kole roga), decrease in imports and increase in demand from pan masala industries.
Sources said that white arecanut prices might maintain an upward trend till November, when fresh arrivals come.
Narasimha Naik, vice-president of Malnad Arecanut Marketing Cooperative Society, said the mismatch between demand and supply of red arecanut will get corrected after the produce from Malnad areas flow to the market from October.
D.M. Shankarappa, an arecanut merchant in Shimoga, said the market was now “in the phase of correction.” He expected prices to stabilise at about Rs. 500 a kg.
Mr. Kammaradi said that a “larger concern” of price rise was that it might lead to unsustainable expansion in the area of cultivation. “Arecanut already has presence in 140 taluks in Karnataka,” he said.
(Inputs from Bageshree S. in Bangalore, Raviprasad Kamila in Mangalore and P.M. Veerendra in Shimoga)