Export of tobacco and tobacco products from India have declined in the first 11 months of the financial year. Volumes declined to 2.23 lakh tonnes for the period ending February 2011 against 2.31 lakh tonnes in the corresponding period previous year, a decline of 3 per cent.

By value, the decline was 5 per cent as sale proceeds dropped to Rs 3,728 crore from Rs 3,909 crore during the period. Excess production in Brazil and Zimbabwe contributed to the decrease in exports, Mr G. Kamalavardhana Rao, Chairman of the Tobacco Board, told Business Line on Thursday.

However, there is a significant increase in volumes and value of processed tobacco. Sale of tobacco products went up to 36,874 tonnes this year from 26,752 tonnes in the corresponding period last year, a growth of 38 per cent. By value, this segment grew 38 per cent to Rs 929 crore from Rs 673 crore.

“The total quantity of produce has come down because of unprecedented rain. But interestingly it was the lower-grade tobacco that had taken a beating. The bright-grade constitutes 60 per cent of the output against 27 per cent last year. We expect a good export opportunity this year,” he said.

As a result, , farmers could achieve break-even this year despite heavy losses caused by floods. Though average yields fell to 1,100 kg a hectare from the average 1,800 kg, increase in bright-grade would offset the yield losses.

Drop in contribution from unmanufactured tobacco, however, resulted in the fall in overall exports. Export of this segment fell to 1.87 lakh tonnes in the 11 months from 2.04 lakh tonnes last year, witnessing a drop of 9 per cent. By value, its contribution fell to Rs 2,799 crore from Rs 3,237 crore, witnessing a decline of 14 per cent.

Auction sales drop

For the auction season in Karnataka as on April 13, 2011, the Board saw a decline of sales to 109.54 million kg as against 115 million kg on the same day last year. Average price fell by 17 per cent at Rs 95 from Rs 111.

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