Virginia tobacco auctions in Andhra Pradesh this season continue to be extremely sluggish, with only 52 million kg (mkg) of the crop marketed at an average price of ₹107.52 a kg, out of a total of 172 mkg of authorised crop. To make matters worse, there is said to be a surplus of 15-20 mkg in the State.

The trade participation in the auctions so far is poor and the reason is said to be the lack of export orders. As the bulk of the tobacco is exported, it is telling on the floors.It is expected that the auctions in the State may stretch up to the last week of September, with 120 mkg yet to be marketed, not to speak of the surplus.

The best quality tobacco is produced in the northern light soils (NLS) of West Godavari and the maximum price touched ₹149 a kg. The average price was ₹117.41. The lowest price was recorded at Torredu in East Godavari in the black soils, ₹80.59.

Tobacco Board Chairman K Gopal said, “there has been visible improvement on the auction floors this week, after the week-end meeting held in Vijayawada and we see a spurt of ₹5-6 a kg for many grades on the floors.”

He said it was imperative for the growers to stick to the crop size fixed by the board in consultation with the trade in view of the international demand.

“When the demand is slack in the international market, it becomes trying for everyone – the farmer, the trade and the board – if there is a substantial surplus, a point which we have been impressing upon the farmer for quite sometime. We are also trying to reduce the area under cultivation,” he said.

Gopal said that board would take up export promotion vigorously, exploring new markets as well as recapturing the old ones.

“The RBI has also revised its earlier directives restricting foreign companies from taking up tobacco-related activities in the country. They can now participate in threshing, auctions and other such activities. It will stimulate competition if the global companies enter the fray,” he said.

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