The Virginia tobacco auctions concluded on Monday in Andhra Pradesh and a total of 190 million kgs of tobacco was sold on the floors at an average price of Rs 93 a kg. The average price last year was Rs 118 a kg. The authorised crop size in Andhra Pradesh for the year (2014-15) was 172 million kgs.  

For the current crop year (2015-16), the Tobacco Board has drastically reduced the crop for Andhra Pradesh by more than 50 million kgs compared to last year and pegged it at 120 million kgs, in view of the market conditions. Therefore, tobacco farmers in many areas of the State are forced to go in for alternative crops.

During the last phase of the auctions in Andhra Pradesh, there was a hue and cry over the low prices paid to low-grade tobacco by the trade and the Union Commerce Minister, Nirmala Seetharaman, had to intervene and announced Rs 20/- more per kg to the low grade tobacco in addition to the price paid by the trade, with the Union Government contributing Rs 15 a kg and the State Government Rs 5 a kg. A total of Rs 28.50 crores was released by the Union Government and the State Government together for the purpose. The step was taken in Sept. after the suicide of two tobacco farmers in the State due to the low prices realised on the auction floors.

In all, more than 60 million kgs of low-grade tobacco was sold on the auction floors in the State, fetching an average price of Rs 54.85 a kg. The medium grade tobacco was 74 million kgs, fetching an average price of Rs 102.99 a kg. The rest was bright grade tobacco fetching an average price of Rs 120.74 a kg.

In Karnataka, where auctions are going on and are in the early stages, 7 million kgs of tobacco has been sold till date at an average price of Rs 140 per kg. The crop in the state may be around 83 million kgs, it is expected, against an authorised size of 100 million kgs.

sarma.rs@thehindu.co.in

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