Sirsi: The areca nut market is currently facing a troubling decline in prices, raising significant concerns among cooperative societies that have invested in purchasing and stockpiling the commodity for profit. This downward trend is primarily attributed to the importation of areca nuts from Bhutan and the mixing of Burmese areca nuts in the local market.
In recent years, cooperative societies in the region have witnessed a substantial increase in areca nut transactions. Seven to eight years ago, the total areca nut trade within Sirsi’s cooperative societies stood at approximately 180,000 quintals. By 2023, this figure surged to around 290,000 quintals. Across various cooperative institutions throughout Karnataka, it is estimated that approximately 4.5 million quintals of areca nuts were traded.
Traditionally, cooperative societies have played a vital role in supporting farmers by purchasing areca nuts at higher prices during market downturns. This year, these societies have collectively purchased and stockpiled over 200,000 quintals of areca nuts. However, the recent challenges—such as ongoing cases of areca nut adulteration, the influx of foreign areca nuts, and aggressive price reduction tactics employed by traders—have contributed to a significant price decline.
As of late May 2024, the average price for a quintal of rashi (superior quality) areca nuts was around ₹50,000, while chali (lower grade) nuts were priced between ₹48,000 and ₹49,000. Unfortunately, prices began to plummet in June and July, coinciding with the seasonal influx of areca nuts into the market.
Gopalakrishna Vaidya, President of TSS Sirsi, has suggested that cooperative societies should consider selling their stockpiled products during this price decline to mitigate potential losses. He highlighted that these societies currently possess the financial capacity to maintain their stocks for 2-3 months.
Market analyst Seetaram Hegde reported that, as of Wednesday, the average price for rashi areca nuts in the Sirsi market had dropped to ₹39,737 per quintal, while chali areca nuts averaged ₹33,958 per quintal. This marks a significant decline from the previous prices, when cooperative societies were acquiring areca nuts at an average rate of ₹40,000 to ₹45,000 per quintal just two months earlier.
The current situation has created an urgent need for cooperative societies to reassess their strategies in light of the changing market dynamics. With external factors impacting prices, these societies must explore innovative solutions to safeguard their interests and support the farmers they represent. The ongoing price decline not only affects cooperative societies but also poses a risk to the livelihoods of many farmers dependent on areca nut cultivation.
As the market continues to evolve, stakeholders are urged to remain vigilant and adaptive to ensure sustainable growth and stability within the areca nut sector.