Buoyant tobacco market brings cheer to farmers

Major cigarette manufacturers and select exporters have vied to buy the bright grade varieties in the price range of ₹195 to ₹200 per kg in the first phase of the auctions

Crop regulators should speed up and finish the in about 100 days for them to get a good price, say tobacco farmers.  | Photo Credit: Srinivas Kommuri

Thanks to favourable grade out-turn, tobacco auctions have commenced optimistically in the four platforms in the Prakasam district.

The major cigarette manufacturers and select exporters have vied to buy the bright grade varieties in the price range of ₹195 to ₹200 per kg in Ongole I, Velampalli and Kondepi in the Southern Black Soil (SBS) region and Podili in the Southern Light Soil (SLS) region.

‘’The auctions are proceeding swiftly with the farmers getting a good price of up to ₹200 per kg,’‘ says Tobacco Board Production Manager Krishna Sri, who oversaw the auctions in Ongole on February 28 (Tuesday).

‘’The farmers have realised an average of ₹197.83 per kg for the 1,075 bales marketed till Tuesday. The auctions are being held in four platforms,” said Ms. Krishna Sri, also the in-charge of the Southern Light Soil (SLS) and Southern Black Soil (SBS) regions. Farmers brought 300 to 400 bales per day to each of the auction platforms.

No takers for meduim-grade

However, the traders showed no inclination to pick up the medium-grade variety and the ungraded tobacco. There were no takers for “mouldy and funky leaf tobacco’‘ either.

Big exporters like Alliance One International and Bommidalla enterprises started bidding in the auction from the beginning, unlike in the past when they used to adopt a wait-and-watch attitude due to delays in the confirmation of orders from their overseas counterparts.

More buyers soon

‘‘More exporters can be expected to enter the market in a big way in the Mysuru region in a fortnight or so, once the auctions are over,’‘ said the Indian Tobacco Association sources. The farmers were asked to bring well-graded tobacco to the auctions to avoid rejections in the early phase.

Meanwhile, the rising mercury kept the farmers on tenterhooks as they feared discolourisation and weight loss to the curing of the leaves. The crop regulator should speed up the auctions and complete them in about 100 days to realise a better price for their produce, said a group of farmers in Ongole.

According to progressive farmer B. Ramanjaneyulu, traders should offer at least a 20% increase in the prices for various grades this season, taking into effect the extensive crop damage caused by the rise in the cost of cultivation.

Though crop coverage went up to 85,000 hectares against 66,000 hectares in the previous year, the productivity was only between five to six quintals per acre this year as against about eight quintals last year.

The Tobacco Board has estimated the production to be 53.20 million kg in the SBS region and 48.20 million kg in the SLS region this Rabi. The crop regulator has fixed a crop size of 89.35 million kg limit for SLS and SBS regions.

The second phase of auctions will commence in Ongole II, Tangutur and Kanigiri in the Prakasam district and Kandukur I, Kandukur II, Kaligiri and D.C. Palli in SPSR Nellore district on March 9.

Meanwhile, Income Tax department officials conducted extensive raids on tobacco traders’ houses and godowns in other areas, Ongole and Tangutur, as they have made big money with the market going northwards in the last couple of years, according to official sources.