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The Union Government has facilitated arecanut imports as an input for production of goods to be exported.
The Director General of Foreign Trade (DGFT) in a recent notice said the import of arecanut as an input would be permitted only when it is by an actual user. It can also be imported by anybody, including the actual user, if the commodity is specifically mentioned in the standard input output norm of the export product.
“Import is being permitted under advance licence scheme only for actual use as an input in production of goods meant for exports,” DGFT officials said. Otherwise anyone else can import by paying appropriate duty, which are as high as 108 per cent. The high duty on arecanut is meant to prevent flooding the domestic market.
Besides being used a key ingredient in pan masala and gutka, arecanut also finds use in leather industry for tanning purpose.
However, the DGFT move to permit imports by actual users under advance licensing has caused some concerns in the arecanut-growing areas of Karnataka and Kerala. Growers feel it will have an adverse impact on the price of the commodity.
Mr M. Srinivas Achar, President of the All-India Areca Growers’ Association, told Business Line that India has substantial production of good quality arecanut. “When we are self-sufficient in its production, we do not want import of inferior quality arecanut from other countries,” he said.
Last year, the Kozhikode-based Directorate of Arecanut and Spices Development had estimated the production of arecanut in the country at 5.35 lakh tonnes from 4.10 lakh hectares in 2010-11. Of that, Karnataka’s share was 2.58 lakh tonnes from 1.95 lakh hectares. Kerala came second with 1.21 lakh tonnes from 0.96 lakh hectares.
Mr Ramesh Kaintaje, who represented farmers in the Joshi committee to fix the production cost of arecanut, said that arecanut was on a bullish trend since March 2011 after a gap of more than 10 years.
(Joshi panel was constituted by the Mangalore-based Arecanut Research and Development Foundation. The panel’s report has been submitted to the Karnataka Government.)
The rates of old stocks of white arecanut were stabilised at around Rs 200 a kg and new stocks at around Rs 140 a kg. Prior to March 2011, these figures were around Rs 95 a kg for old stocks and around Rs 75 a kg for new stocks. Meanwhile, input costs have almost doubled during this period.
“This one-year rally had built confidence among farmers’ community. Such a move to allow imports will again put the arecanut market into bearish phase,” he said.
Mr Ravish Hegde, Managing Director of the Sirsi-based Totagars’ Cooperative Sale Society (which is actively involved in arecanut trade), said the DGFT’s move may have an impact on the price of arecanut in the domestic market. There could be a chance of 15-20 per cent decline in the price of the commodity, he said.
Arecanut, which was smuggled across the border, now would be imported legally, he added.
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