Arecanut price rises 21% after MIP raised

With the government raising the Minimum Import Price (MIP) for arecanut to Rs 251 a kg, growers say this has led to a rise in its market price. They're hoping for more to come.

The government decision was to help the growers, faced with cheaper import. The MIP was raised from Rs 162 a kg, on petitions from growers.

Suresh Bhandary, managing director of the Campco growers cooperative, said market prices had risen after the MIP hike to Rs 200 a kg from the earlier Rs 165-170 a kg. He expects it to reach Rs 220-230 in the coming days. However, say growers, their production cost is Rs 250-337 a kg.

The annual output is around 700,000 tonnes, as is domestic demand. Around 70,000 tonnes was the latest annual import. Growers complain that traders import from Indonesia via Sri Lanka, getting a ‘Certificate of Origin’ from the latter. Imports from Lanka attract no customs duty under a free trade agreement.

India imported 67,824 tonnes worth $159 million in 2015-16, as against 110,000 tonnes worth $230 mn in 2014-15. In 2011-12, sowing was on 441,000 ha, which increased to 473,000 ha in 2015-16.