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High demand for areca palm brings potential oversupply crisis

The widespread areca palm cultivation could lead to an oversupply crisis. (Image source: Adobe Stock)

Amid reports of substantial acquisitions of young areca palm by Chinese traders, Nguyễn Như Cường, head of the Department of Crop Production under the Ministry of Agriculture and Rural Development, has cautioned farmers on over-cultivating areca palm at the detriment of other crops

Cường warned that the widespread areca palm cultivation could lead to an oversupply crisis and emphasised the importance of keeping abreast of market trends.

This is not the first time Vietnamese areca palm has been in high demand, with similar events taking place several years ago in the Red River Delta and the Central Highlands. 

"Traders have been buying areca palm through cross-border channels, not as part of any official trade quota between the two countries. Areca palm is not recognised as a major food source in Vietnam, and the country currently has no planning for the production of areca palm," Cường said. "It's important to remember it may take between three to five years to harvest areca palm. Farmers must remain very cautious about its future demand."

The surge in demand for areca palm is likely to be in the Chinese market, but It is just as probable to diminish in the near future. 

The department advised farmers not to abolish other crops to grow areca palm to avoid incurring potential financial losses. In the event demand proves stable, farmers and local authorities should work together to build a proper plan for the development and production of areca palm, as well as to establish a trade protocol secured by long-term contracts and official export channels, rather than dealing directly with traders. 

The department's official stand is to advise against growing areca palm in large numbers as it is not considered a food source.