Agri Business

E-auction helps tobacco growers fetch higher prices

Anil Urs Bangalore | Updated on May 27, 2013 Published on May 27, 2013


Tobacco farmers in Karnataka have realised 24.95 per cent higher income this year (2012-13) by getting an average of Rs 115.82 a kg compared with Rs 92.69 last year (2011-12).

This higher income or realisation is attributed to introduction of e-auction, streamlining the auction procedure leading to more domestic and international bidders taking part.

“Karnataka farmers this year have secured the best possible price to his produce, a reflection of true market realities. Farmers have realised the benefits of e-auctions with record grade wise averages and 25 per cent increase in overall price over 2011 season which was held under manual auction,” B.N. Jayaram, Tobacco farmer from Hunsur (Mysore district) and Tobacco Board member told Business Line.

“This year under the e-auction procedure saw participation of many buyers representing both domestic and international manufacturer’s competing for their requirement,” he added.

“This auction year, farmers could see the price movement on LCD monitors fixed at different locations as different traders bid for their produce. The system removed uncertainty and confusion among farmers on pricing and took instant decision to sell or withhold it,” he added.

The new auction system has improved efficiency, reduced cost and improved revenue to the Tobacco Board due to higher price realisation,” he further added.

Of the 93.86 million kg (mkg) marketed, bright grades comprised of 20.79 mkg and were traded at an average price of Rs 144.

Medium grades, 44.66 mkg, were traded at Rs 127.72. Low grades, 28.41 mkg, were traded at Rs 76.5.

Due to new transparent e-auction system, more number of domestic manufacturers, exporter and local traders took part in the auction process.

At the Karnataka auctions, which recently concluded saw ITC buying the maximum, 30.98 mkg (33 per cent of the total marketed), followed by GPI at 13.33 mkg (14 per cent) and AO1 9.48 mkg (10 per cent).

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Published on May 27, 2013
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