Tobacco prices rise in Karnataka auctions on higher demand

Tobacco prices are ruling higher in Karnataka where auctions for the 2023-24 marketing season have commenced recently with demand being higher.

Prevailing auction prices are averaging at around ₹235.53 per kg against ₹202. “Farmers are comparatively realising good prices this year on higher demand,” said B V Javare Gowda, President, Federation of Karnataka Virginia Tobacco Growers Association. The higher demand has been fuelled by a decline in production in countries such as Brazil and Africa, he said.

Against an authorised crop size of 100 million kgs (mkg) in Karnataka, the production this year is likely to be between 80-85 mkg, Gowda said.

Last year, the production stood at around 60 mkg, impacted by excess rains. This year, lack of adequate rains is also seen impacting the output, Gowda said. Tobacco is largely a rain-fed crop and rains this year have been erratic in south interior Karnataka, where the crop is largely grown.

Rates may top ₹300

So far, about 6.75 million kg have been transacted across all auction platforms in the State as of October 16. Farmers are offering the medium and low grades, so far and may bring in the higher grades after the festive season, Gowda said. Once farmers start bringing in the higher grades for auction, prices may move up further, he said. Last year, towards the end of the auction period, the average prices moved up to₹280 per kg. This year, prices may surpass last year’s levels and touch ₹300, he said.

The harvest of tobacco crop is over and growers have been curing and grading the produce in their barns. Tobacco is grown in over 75,000 hectares in the state. The Virginia tobacco, main variety produced in the southern parts of Karnataka is branded as Mysuru tobacco and has good export demand. Mysuru tobacco can be blended with any other tobacco in the world as its chemistry is good and it has less nicotine, less tar and less sugar, he said.

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