Wild fluctuation in arecanut prices fuels apprehensions

‘Decline in yield caused by drought has created a mismatch between demand and supply’

In the past too, the enhancement in the flow of arecanut produce to the markets following price escalation had triggered a slump in the prices.

Arecanut prices of have witnessed wild fluctuation in past week fueling apprehension among the growers.

The price of rashi idi variety of arecanut that was at ₹27,950 per quintal on March 3, reached ₹55,000 on April 12. The price had almost doubled in 40 days. The price of other varieties had also witnessed a similar surge during this period.

However, arecanut prices witnessed a sharp decline of around 20% the next day. The rashi idi variety was purchased at ₹44,600 on April 13.

Demand and supply

D.M. Shankarappa, president, Shivamogga District Chamber of Commerce and Industries, told The Hindu that there was a rapid surge in the price from April 10. When the price of rashi idi crossed ₹50,000 on April 12, there was sudden increase in the flow of produce to the market the next day resulting in a slump in the price.

He said that the decline in the yield caused by the drought that has prevailed for two consecutive years now, has created a mismatch between demand and supply resulting in enhancement in the price of the produce in recent times. Many medium and large scale farmers have not disposed the arecanut they had harvested in the year 2016 yet. Following the escalation in the price, the produce stocked with the farmers has started to arrive to the market. The gap between the demand and supply will be reduced in coming days and the prices will stabilise by last week of April, he said.

H.R. Basavarajappa, general secretary, Karnataka Rajya Raitha Sangha, told The Hindu that in the wake of the fluctuation in the prices, farmers should adopt shrewd and disciplined selling practices.

In the past too, the enhancement in the flow of the produce to the market following price escalation had triggered a price slump, he said. The farmers should avoid bringing the produce to the market lump sum and should dispose the stock periodically atleast in three to four phases after the harvest instead. This would reduce the losses they may incur by the slump in the price and ensure that the profits caused by escalation in the price are not lost, he added.