The Hindu Business Line : Tobacco price tops $2 per kg in AP sales

The Virginia tobacco produced in Andhra Pradesh for the first time crossed the $-2-per kg-mark on Monday, with an all-time high of Rs 95.40 per kg offered on the Jangareddigudem floor in West Godavari.

The sudden spurt in prices is being seen as an offshoot of the in-principle approval of the Tobacco Board to reduce the total Virginia tobacco production by 50 per cent in 10 years beginning 2009 auction season in Andhra Pradesh and Karnataka.

Farmers have welcomed the proposal sent by the Board to Ministry of Agriculture, Commerce and Finance.

The announcement on Sunday by the Tobacco Board Chairman, Mr J. Suresh Babu, coupled with shortage of quality leaf on the auction platforms and projections of lesser arrivals, pushed up the prices.

Lot bidding

Traders who had put a cap on the price to offer on the high-end were forced to resort to ‘Lot Bidding’, taking the price from Rs 80-95.40 a kg on the northern light soil floors in West Godavari. The prices rose to Rs 85.40 per kg on southern lights soil floors; Rs 83.60 on southern black soils and even on the Central black soils at Keesara where the auctioning began on Monday, it took off from Rs73 a kg.

The average price offered on all floors went up to Rs 68.340 per kg with 21.5 million kg already lifted from platforms as on Monday.

The President of the AP Virginia Tobacco Growers’ Association, Dr Y. Sivaji, expressed happiness at the good prices being offered for the crop on the auction floors.

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