Areca nuts market in India

Earlier Report Observations

From 2018 to 2022, India's areca nut market volume expanded from 847 thousand tons to 1 733 thousand tons. This growth was initially fueled by the emergence of value-added products and the development of the gutkha industry, which increased domestic demand. The market accelerated in 2020 when cultivation area in Karnataka rose by 21%, leading to a 39% production surge in the state, supported by growing international demand from countries like the US and Sri Lanka.

Production gains continued in 2021 and 2022 as farmers adopted precision farming, advanced equipment, and integrated health management, boosting yields. Government policies promoting mechanization, such as mechanical dehuskers under micro food processing schemes, further enhanced processing efficiency. Concurrently, export destinations diversified to include the UK, UAE, and Malaysia, contributing to overall market expansion.

In 2023, the market volume contracted to 1 395 thousand tons. A sharp 50% drop in prices squeezed farmer incomes, while labor shortages and a decline in local chewing habits due to rising health consciousness reduced consumption. These factors, coupled with increased regulatory scrutiny similar to tobacco, tempered demand and led to the market's downturn.

Production areca nuts in India

In kind, 2017-2020, K t

India was the world's leading producer of areca nuts from 2017 to 2020, ranking first globally by production volume.

Top producers of areca nuts, 2017-2020

World map of production of areca nuts, 2017-2020

India's areca nuts production increased for the third consecutive year. In 2020, the country produced 1 382 thousand tonnes, marking a dramatic 53.4% increase compared to the previous year. Between 2017 and 2020, production grew by 91.1%, equivalent to an annualized growth rate of 24.1%.

Annual dynamics of production in India in kind, 2017-2020, K t

Exports areca nuts from India

Exports in kind, t

India's cross-border shipments of areca nuts increased for the second consecutive year. In 2020, exports reached 2 519 tonnes, reflecting a solid 11.0% gain compared to 2019. However, over the period from 2017 to 2020, exports decreased by 37.8%, with a compound annual growth rate of -14.6%. The lowest export volume was recorded in 2018 at 2 240 tonnes, which also saw the largest decline of 44.6%.

Annual dynamics of product's exports from India in kind, 2017-2020, t

From 2017 to 2020, the principal destinations for India's areca nuts exports were Maldives (28.0% of exports in kind), Nepal (26.4%), and Sri Lanka (12.3%). Together, these three countries accounted for 66.7% of total export flows.

Structure of product's exports in kind by countries, 2017-2020

World map of product's exports from India in kind, 2017-2020

Exports in value, K $ US

India's areca nuts export value increased for the second consecutive year. In 2020, export volume reached 10 310 thousand US dollars, up by 14.5% compared to the previous year. The lowest value was recorded in 2018 at 8 829 thousand US dollars, which also experienced the largest decline of 15.1%.

Annual dynamics of product's exports from India in value, 2017-2020, K $ US

From 2017 to 2020, Maldives (35.4% of exports in value terms), Sri Lanka (12.2%), and Nepal (12.0%) continued to be the main buyers of areca nuts from India, jointly accounting for 59.7% of total export value.

Structure of product's exports in value by countries, 2017-2020

World map of product's exports from India in value, 2017-2020

Imports areca nuts to India

Imports in kind, t

India's areca nuts imports showed noticeable fluctuations during the period. Import volumes reached their lowest point in 2017 and peaked in 2020, with a 1.9-fold difference between these years. In 2020, imports reached 25 485 tonnes, which is 87.2% higher than in 2019. The largest decline was recorded in 2019 at 18.2%.

Annual dynamics of product's imports to India in kind, 2017-2020, t

From 2017 to 2020, Sri Lanka and Indonesia consistently accounted for 95.8% of India's total areca nuts imports in kind, indicating a highly concentrated market with a long tail of smaller suppliers.

Structure of product's imports in kind by countries, 2017-2020

World map of product's imports to India in kind, 2017-2020

Imports in value, K $ US

India's areca nuts import market showed signs of volatility over the observed period. The lowest value occurred in 2019, while the highest stood at in 2020, with a peak-to-trough ratio of 2 times. In 2020, import volumes totaled 75 453 thousand US dollars, which is 96.4% greater than a year earlier. The minimum value was recorded in 2019 at 38 427 thousand US dollars, which also saw the largest decline of 32.6%.

Annual dynamics of product's imports to India in value, 2017-2020, K $ US

From 2017 to 2020, Sri Lanka remained the key source for areca nuts imports to India, accounting for 74.8% of total imports in value terms, while other destinations were much less significant.

Structure of product's imports in value by countries, 2017-2020

World map of product's imports to India in value, 2017-2020