The Hindu Business Line : AP tobacco auctions fetch better prices this year

Price rise
For the tobacco grown in the northern black soils, the average price this season was Rs 39.73 a kg against Rs 33 a kg last season.
In the central black soils, the prices were Rs 40 a kg (Rs 32).
In the southern black soils, it was Rs 42.76 a kg (Rs 33.70).
In the southern light soils, prices fetch Rs 41.94 a kg (Rs 35).

BUYERS BIDDING at the tobacco auction platform of the Tobacco Board at Tangutur, near Ongole, in Prakasam district of Andhra Pradesh.(File picture)

Guntur , July 3

Tobacco farmers in Andhra Pradesh are a happy lot this season. For the first time in the past two decades, they have got remunerative prices for the crop — Rs 10 more per kg than last season — and the prospects for the next season too are bright, as currently there is good demand for Indian tobacco in the international market.

In the AP auctions this season, which concluded on Saturday, 145.2 million kg of tobacco was sold at an average price of Rs 46.30 a kg against 153 mkg sold last season at an average price of Rs 36.16 a kg. There is a clear increase of more than Rs 10 per kg on the aggregate for tobacco grown in the State. This kind of price rise had not been witnessed in Andhra Pradesh in recent times, even though Karnataka farmers did get such high prices.

For the tobacco grown in the northern black soils, (Bhadrachalam and Torredu), the average price this season was Rs 39.73 a kg against Rs 33 a kg last season. In the central black soils (Tatikonda and Nandigama), the prices were Rs 40 a kg (Rs 32); in the southern black soils (Vellampalli, Ongole, Tanguturu and Kondepi) Rs 42.76 a kg (Rs 33.70) and in the southern light soils (Kandukuru, Podili, D.C Palli and Kaligiri) Rs 41.94 a kg (Rs 35).

Farmers in the northern light soils of West Godavari district (Koyyalagudem, Jangareddigudem and Devarapalli floors) derived the maximum benefit, the average price being Rs 57.75 per kg against Rs 44 last year.

Global market trend

Expressing happiness over better prices realised by AP farmers this season on the auction floors, Dr Y. Sivaji, President of the AP Tobacco Growers' Association, attributed it to slump in crop production in the international market.

"In Zimbabwe, the European Union and Brazil, it is estimated that there is a slump of more than 100 million kg. China is also not dumping tobacco into the international market as in the past.

These factors may have led to the greater demand for Indian tobacco and price hike,'' he opined.

However, he said, there was no cause for any euphoria, "as the Indian farmer is still getting less than a dollar for a kg of tobacco, against $2 or $3 paid to his counterpart elsewhere in the world.

Even allowing for the lower cost of cultivation in India, the farmer here is not getting his due.''

He also noted that the price hike in the southern light soils was not much, even though the tobacco produced in the region was comparable to the crop grown in the Karnataka light soils.

Dr Sivaji said the trade should seize the opportunity and boost quality exports instead of "resorting to undercutting as in the past''. He also urged them to support the farmer on a sustainable, long-term basis to get quality crop for export. Otherwise, he cautioned that the farmer might switch over to alternative crops.

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