Instead of a fall, arecanut prices rise post-gutka ban

Locally grown varieties that cost around Rs. 130 per kg now sells at Rs. 180 per kg

It's looking up: Dispelling widespread concern, arecanut prices are rising despite the gutka ban. — File Photo

The price of arecanut has risen in the past one month, dispelling concerns of a potential fall after the State government’s decision to ban the sale of gutka.

The price of a kilogram of locally grown api, rashi idi and bette varieties of arecanut, which was around Rs. 180 per kg prior to the ban has surged to Rs. 210 per kg now. Owing to the imbalance between demand and supply, the prices are expected to increase further.

After the Centre had increased the minimum import price of arecanut from Rs. 75 to Rs. 110 per kilogram on May 13, the price of locally grown varieties of arecanut that was around Rs. 130 per kg rose to Rs. 180.

When the State government announced the gutka ban on May 31, arecanut growers had expressed apprehensions that the prices would crash.

However, gutka has entered the market in a new avatar. As mixing arecanut — considered a food product — with tobacco is banned in the State, the firms that were earlier engaged in the production of gutka are now supplying scented arecanut and tobacco in separate pouches. Consumers can mix the contents in these two pouches and consume them.

Prior to the ban, some firms used low quality arecanut imported at cheap prices for their products. After the ban, the gutka firms are using locally grown varieties of arecanut known for their quality and aroma to popularise their new products. This has also resulted in an increase in demand for locally grown arecanut.

President of Shimoga Arecanut Merchants’ Association D.M. Shankarappa told The Hindu that there is shortage of arecanut in the market at present. The farmers are also holding on to their stock as they are waiting for the prices to increase further.

He said arecanut prices are likely to remain stable even when fresh produce enters the market in October. The positive sentiment of the market is apparent, he said.

Owing to incessant rain in the district this year, nearly 50 per cent of arecanut plantations have been infected with fruit rot disease, also known as kole roga. According to sources in the Department of Horticulture, the arecanut yield is likely to come down by 20 per cent in the district this year.

A similar situation prevails in Chikmagalur district. The arecanut prices are likely to remain high even after the new harvest as the flow of produce to the market will be less this year.