The Hindu Business Line : Traders `cartel' blamed for fall in tobacco prices

Tobacco traders are depressing prices on the Karnataka auction floors by forming a syndicate and denying farmers their due, even though there are no carryover stocks and the international market scenario is encouraging, according to Dr Y. Sivaji, President of the AP Tobacco Farmers' Association.

In a statement issued on Wednesday, Dr Sivaji said tobacco auctions in Karnataka had started on September 6 on a bright note on nine auction floors, with the average price being Rs 63.46 per kg. Enthused by the high prices, farmers started bringing in the produce on a largescale and arrivals had swelled to 12,000 bales a day. Nearly 13-14 million kg could be sold in that State against only 5-6 million kg during the corresponding last year (last year's average price being only Rs 46.51), "but then there has been a sudden slump (ranging from Rs 5 to Rs 15 per kg for different grades and styles of tobacco) as the trade is playing foul."

Dr Sivaji said last season the trade had resorted to a "similar trick" on the Andhra auction floors. "There are no carryover stocks with the trade and there has been a production slump of 100 million kgs in the international market, with crop size reduction in Zimbabwe, Brazil and the US. China too is not pushing tobacco exports as aggressively as it used to, as it has to confirm to WTO stipulations. Therefore, there is absolutely no reason for the trade to depress prices," he argued.

AP situation

He also reminded that the trade had asked for an increased crop size, and forced the Tobacco Board, which had initially fixed the crop size in the State at 129 kg, to revise it to nearly 150 million kg. "The farmers in Andhra Pradesh are taking up sowing now and the manner in which the trade is depressing prices in Karnataka is not very encouraging for the AP farmers. It sends the wrong signals," he said. He also said there was no surplus in Karnataka this season and the production was roughly the same as the prescribed crop size, 82 million kg.

He said he had apprised the Tobacco Board Chairman of the situation in Karnataka, and of the likely repercussions in AP, and urged him to take corrective steps.

More Stories on : Tobacco | Economic Offences

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Spot rubber steady

Sugar stocks turning sweet

Tea e-auctions to ensure fair price discovery

Cotton: Varietal glut, shortage to skew market

Traders `cartel' blamed for fall in tobacco prices

Pepper production seen lower by 20,000 tonnes

Pepper futures down on sales

Turning competitive