The Hindu Business Line : Tobacco continues to fetch higher prices in AP

“Prices have been ruling high for the past one month or so, and so far roughly 40 million kg of the crop has been sold at an average price of Rs 134 a kg.”

Ch.R.S Sarma

Rajahmundry (Andhra Pradesh), July 1 Tobacco prices are still ruling high on the auction floors of Andhra Pradesh this season. So far 153.41 million kg of the crop has been sold in the State at an average price of Rs 108.59 a kg. It is expected that the auctions will conclude in the second fortnight of this month.

State production

The actual production in the State may be more than 190 million kg and it could even touch the 200-million kg mark against the authorised quantity of 171 million kg. In spite of the substantial surplus, there is no depressing impact on the auction prices, as there is good demand in the international market.

Highest price

According to Mr V. Manmadha Rao, the regional manager of the Tobacco Board, the highest price of Rs 165 a kg was recorded on the northern light soils in West Godavari. “Prices have been ruling high on the five floors of West Godavari for the past one month or so, and so far roughly 40 million kg of the crop has been sold at an average price of Rs 134 a kg, which is the highest in the State, and even more than the Karnataka prices,” he said.

Shortfall in Zimbabwe

He attributed the rise in prices to the shortfall in the crop in Zimbabwe, due to the political crisis, and other favourable conditions in the international market. “However, China grows a huge quantity of tobacco and, as Tobacco Board Chairman, Mr J. Suresh Babu has been pointing out, if that country dumps it in the international market, we will run into trouble. We are trying to impress it upon the farmers and trying to reduce the crop size,” he said.

Difficult task

The task was becoming increasingly difficult, and even impossible, due to the high prices on the auction floors. The high prices of Virginia tobacco had a good impact on the prices of White burley tobacco as well. White burley is grown in the agency (mountainous) areas of East Godavari district, known as Yeleswaram burley in the international market. Burley prices have shot up to Rs 65 a kg. It is used for blends in cigarette manufacture.

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