The production cost of arecanut in India is around Rs 46 a kg. But if you import the commodity, you can get it for around Rs 13.5 a kg.
And, who will not grab the opportunity. So, India imported 53,275 tonnes of arecanut during 2005-06 with Indonesia contributing a major share of 74.26 per cent for this.
The wake up call for the domestic arecanut sector is that the commodity was imported at much below the cost of production in India.
According to Arecanut and Spices Database, prepared by the Kozhikode-based Directorate of Arecanut and Spices Development, shows that Indonesia exported 39,564 tonnes of arecanut to India during 2005-06, whereas the total production of the commodity stood at 42,000 tonnes during 2004 there.
Practically, over 90 per cent of arecanut produced in Indonesia was exported to India. Others who sent arecanut to India included Bangladesh, Thailand, Myanmar and Nepal.
In 2005-06, Bangladesh exported 8,041 tonnes of arecanut, Thailand 3,088 tonnes and Myanmar 1,277 tonnes. Even Nepal exported 636 tonnes of arecanut to India. However, Nepal does not figure in the list of arecanut-producing countries.
India imported 53,275 tonnes of arecanut at Rs 72.28 crore. This works out to be Rs 13.56 a kg, which is much below the cost of production. Indonesian arecanut was exported at Rs 12.67 a kg during 2005-06.
The cost of production of arecanut is Rs 46.77 a kg in India. The DASD took Malappuram in Kerala as the study area during 2005 for working out the cost of production.
While the arecanut imports witnessed a steady growth from 2001-02 to 2005-06, the unit value for the commodity came down each year. During 2001-02, the country imported 14,788 tonnes of arecanut at Rs 17.59 a kg.
The imports witnessed a growth of 45.06 per cent during 2002-03, and the country imported 21,452 tonnes at Rs 16.80 a kg. The year 2003-04 saw a growth of 30.32 per cent in imports with 27,957 tonnes of the commodity reaching the Indian market at Rs 13.78 a kg.
While the imports witnessed a growth of 14.90 per cent during 2004-05, it saw a big jump of 65.84 per cent during 2005-06.
