After depressed market condition and suspension of auctions ahead of GST rollout, the market is looking up with clarity emerging on the new regime.
Exporters have come back in a big way to the auction platforms in both Southern Black Soil (SBS) and Southern Light Soil (SLS) regions in Prakasam district.
The market had been lacklustre prior to introduction of GST from July 1, as both the farmers and traders kept away from the auction platforms fearing adverse effect of 5% GST on tobacco leaves and 28% on unmanufactured tobacco.
With the Centre coming out with guidelines for claiming reimbursement of the GST paid by exporters by filing monthly returns, big players such as Polisety, PTC, Deccan, and Ethnic have returned to the market to lap up the farmers produce.
Highest price
As a result, the bright grade tobacco fetched ₹190 per kg on Saturday, the highest during this marketing season, in the Ongole II auction platform, said SBS regional manager G. Umamaheswara Rao.
While the bright grade varieties attracted buyers in the price range of ₹185 to ₹190 per kg, the low grade varieties, which were ruling at ₹60 per kg prior to GST, were up by ₹5, said SLS regional manager G. Ratnasagar.
There was a quantum jump of ₹25 to ₹30 for medium grade varieties after GST, he said, adding the rejection rate, which was over 20% earlier, had come down to a mere 5%.
“Going by the present trend, the market may end up with farmers realising an average price of ₹120 per kg for about 50 million kg produced in the traditional tobacco growing areas this year as against ₹108 per kg in the previous season,” he told the The Hindu .
Farmers’ plea
However, the farmers, who were yet to sell about 14 million kg, wanted the manufacturers and traders to buy the stock at a better average price of ₹135 per kg. “If the prices are not attractive even in a year when production is short of the crop size fixed by the Tobacco Board by 30 million kg because of decline in productivity and parasitic weed Orabanche cernua infestation, how are we to break even, leave alone making some decent gains,” asked Ongole II Farmers’ Association president V.V. Prasad.
The Tobacco Board should impress upon the trade to come out with Minimum Guaranteed Price (MGP) while submitting indents to enable the farmers to make well-informed decision on whether to grow the crop or not next year, said Ongole I Farmers’ Association president S. Gurava Reddy.
The crop size should be brought down to 110 million kg in the State during the next cropping season as against 130 million kg fixed this last year, added another farmer leader P. Venkateswarlu
