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With exports declining in 2010-11, the Tobacco Board has held a meeting with top exporters of tobacco products to revive and increase exports by 20 per cent as projected by the Union Ministry of Commerce.
Keeping in view the sensitivities involved, the Board discussed strategies to increase productivity from the existing area of production, while reviving and finding new markets abroad that give higher yields. “We are not going to issue any new licences. We would like to increase productivity from the existing acreage,” Mr G. Kamalavardhana Rao, Chairman of Tobacco Board, told Business Line .
Productivity in India was put at 1,500-1,700 kg a hectare as against 2,200 in some Western markets. With the help of CTRI, the Board would encourage new hybrids to improve productivity.
Egyptian offer
The trouble-hit Egypt had come out with a tender for 12 million kg. This almost looked a good opportunity for Indian exporters. The price offered by it, however, turned out to be a dampener. The Arab country offered only $3.5 a kg, while it would cost $3.3 a kg on average to process and make it export ready. “A price above $4 would give good returns. South East Asia, Russia, Iran and the Gulf countries offered a good price. We working opportunities to tap these markets more and in a concerted effort,” Mr Kamalavardhana Rao said.
Export rejections
Yet another issue that worried the tobacco industry was rejections under NTRM (Non-Tobacco Related Materials) norms. The fact that 10 crore kg of tobacco was rejected in 2010-11 showed how serious the problem was.
“This happens when farmers use sheets made of fertiliser bags. The leftover fertilisers creep into the tobacco bags when packed. Also, some do not employ professional graders, increasing the scope for sneak-in of non-tobacco materials. We have begun efforts to educate the farmers on,” he said.
The exporters asked the Board to set up a Task Force to ensure NTRMs were reduced this year. The total exports decreased by three per cent in the first 11 months to 2.23 lakh tonnes (lt) from 2.31 lt in the same period last year. However, there was an increase of 38 per cent in exports of tobacco products that went up to 36,874 tonnes from 26,752 tonnes.
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