Thai betel nut exporters are struggling with tariff barriers from India as well as the impact of the armed conflict between the Myanmar military and rebel forces.
A betel nut grower in Phatthalung's Tamot district said dried betel nuts are selling to local villagers for 8, 10 or 12 baht per kilogramme in the current harvest season, depending on the moisture content. A low moisture content fetches a higher price.
Betel nuts from Phatthalung's Kong Ra district are exported for 17 baht/kg while those from Songkhla fetch a price of 15 baht/kg.
"In previous years, the prices were as high as 50-60 baht," a farmer said. Betel nuts, also known as areca nuts, are chewed for their stimulating effects.
Betel nut chewing is common in many Asian countries, including Bangladesh, Myanmar, Cambodia, Thailand and Laos. The nuts are also classified as a carcinogen that can cause mouth cancer.
A source said two main factors that are pushing the prices down are the fighting in Myanmar and the high tariffs imposed by India. The armed conflict in Myanmar has obstructed exports there, forcing traders to pay high amounts in "facilitation fees" to get their products across the border, the source said.
"As a result, traders have to force growers to sell their products at low prices to offset the fee payments," the source said.
India, a major importer of betel nuts, has also now restricted betel nut imports to protect domestic industries following the impact of foreign imports.
Dares Kittiyopas, president of the Thai Society of Agricultural Engineering, told the Bangkok Post that exports of green and dried betel nuts were worth 2.55 billion baht last year. More than half the products, or 54.6%, were exported to Myanmar, followed by Vietnam (18.6%), Bangladesh (11.9%) and India (7.3%), she said.
Exports to Myanmar are dried betel nuts and most of them are re-exported to India and Bangladesh, she said. India is the world's largest producer and importer of areca nuts, she said. Currently, the tariff on the import of areca nuts to India is US$8,140 (294,000 baht) per tonne, and the basic customs duty is 100% ad-valorem.
The import of areca nuts is prohibited if the cost, insurance and freight (CIF) value is below 351 rupees (153 baht) per kilogramme, except when imported by 100% export-oriented units and units in the special economic zone, subject to the condition that no domestic tariff area (DTA) sales are allowed.
Ms Dares said the fighting in Myanmar has prompted betel nut traders to pay high customs duties to transport their products across the border into Myanmar. India and Bangladesh have also banned the import of areca nuts from Myanmar since June last year, affecting Thai imports which mostly go through Myanmar to those countries, she said.
"The government should hold talks with India to ease the protectionist measures under the Asean-India free trade agreement, the Thai-India free trade agreement and the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation, of which Thailand and India are members," she said.
The government should also consider exporting betel nuts to new markets such as the UK and the UAE where demand is high among immigrants from India, Bangladesh, Pakistan, Asia and Africa, she said.