Kochi: Arecanut growers in India are up in arms against a recent government decision to remove port restrictions for the commodity—also known as betel nut— imported from Myanmar as they say this would flood the market and hurt their trade. They also want the government to fix a minimum floor price for the imported nuts.
The Directorate General of Foreign Trade had, earlier this month, allowed the import of the nuts from Myanmar through the Kolkata port for use in Nepal, reversing its earlier stand to import only through the New Mangalore Port in Karnataka. Domestic growers claim the Kolkata port does not have the facilities to certify the commodity and that a good part of the imports meant for Nepal would end up in the Indian market.
“Imports, especially by underinvoicing material from Indonesia, have been taking place for quite some time, creating a glut in the market,” said S.R. Ramamurthy, president of the Central Arecanut and Cocoa Marketing and Processing Co-operative Ltd (Campco), India’s sole agency for arecanut procurement.
“It is high time the government intervened and saved the 600,000 arecanut growers across the country,” he said.
Campco plans to meet government authorities next week to discuss the issue, he added.
India produces about 600,000 tonnes of arecanut a year, 60% of which is of the high-quality red variety and the rest, white. The country has more than 381,000 acres under arecanut cultivation, or 56% of the global area under the crop. Indonesia follows with 16% of the global area, and Myanmar with 5.5%.
Still, more than 100,000 tonnes of the nut is imported a year now, mainly from Indonesia, while Sri Lanka, Thailand and Myanmar supply small quantities, Ramamurthy said.
India imported 75,497 tonnes of arecanut worth Rs108.44 crore in 2006-07, according to data available with the Directorate of Arecanut and Spices Development, an agency under the ministry of agriculture.
The price for red-coloured Indonesian nuts after customs duty of 108% is around Rs60 per kg, whereas the local red variety, considered to be of higher quality, costs Rs80-90.
The cost of producing red arecanuts is estimated at Rs120 a kg, while that for the white variety is Rs90 a kg, but growers are forced to sell at lower prices because of the flood of imported nuts, says Ramamurthy. India exports 40,000 tonnes of arecanut at Rs70 a kg, he added.
Ramamurthy charged that a good portion of the arecanut imports from Myanmar meant for use in Nepal is diverted to India, and that other imports, too, are routed through ports in Sri Lanka to take advantage of India’s free trade agreement with that country. He also said traders underinvoice the nuts and pay lower customs duty.
Growers have been asking the government to fix a minimum tariff of Rs60-65 a kg for imported nuts to check under-invoicing and flooding of the domestic market.
Meanwhile, Campco, which has its headquarters in Mangalore, has been asking the government to restrict imports through the New Mangalore Port as it has the staff and technology to certify the quality of the imported material.
Arecanut cultivation became popular in the mid-1990s when prices shot up to Rs140 a kg, said M. Tamil Selvan, director at the arecanut and spices development directorate in Kozhikode.
India’s production of the nuts has increased significantly, from about 75,000 tonnes a year in the mid-1970s to about 600,000 tonnes a year now, mainly because the cultivation area has been extended in Karnataka and Kerala, in addition to Assam, Bihar and the Konkan belt along the west coast, he added.