China has shown interest in Indian areca nut. The first consignment of 400 kg of tender areca nut, which is used as a mouth freshener, will be shipped as samples to China this week. Chinese firms are working with Campco, a co-operative of areca nut and cocoa farmers, to source areca nut from India.

M Suresh Bhandary, managing director of Campco, said one trial batch being shipped this week is for quality test.

Campco will supply to Kou Wei Wang (King of Taste), one of the largest Chinese mouth freshener manufacturers.

Bhandary said the price being offered is Rs 50-60 a kg lower than quoted, but as volume picks up, this issue will be addressed.

The Chinese buyer has indicated its preference for first-quality areca nut and indicated a price of Rs 350-400 a kg.

The husk of the tender nut is used widely in China to make mouth freshener and other edible items after due processing. Areca nut is grown to the tune of 122,000 tonnes in Hunan province of China annually, but the demand is much higher at 700,000 tonnes.

There are some 20 manufacturers of areca nut mouth fresheners across China. As more Chinese are using mouth fresheners to quit smoking, the supply is not enough.

China currently meets its requirement from Indonesia, where it is a wild crop, Myanmar, and some other countries.

India’s areca nut production is estimated at 703,000 tonnes a year. Till a few years ago, this crop was attractive from the growers’ perspective. However, prices have plunged from nearly Rs 75,000 a quintal to Rs 25,000-30,000 now. This might fall further as farmers are switching from paddy to this crop. Because of this, production is expected to go up by 50,000 tonnes, which will put more pressure on pricing.

As part of the de-risking strategy, the growers are now looking at the export market. Earlier, areca nut used to be exported to Pakistan, but in a very small quantit.

sources ;.business-standard.com