Tight supply may lift AP tobacco prices

Ch. R.S. Sarma Guntur | Updated on February 24, 2011

Virginia-tobacco auctions began on Thursday in Andhra Pradesh on six floors in the southern light soils of Prakasam and Nellore districts. They will begin on the remaining floors in the State in two phases in March, according to sources in the Tobacco Board here.

Auctions began on two floors at Podili and two more at Kandukuru, and one apiece at Kaligiri and D.C. Palli. Auctions on 12 more floors will begin on March 10, and on two more during the last week of March or the first week of April, according to the schedule announced by the board.

Auctions are concurrently going on in Karnataka, and they may conclude by the first week of April or so. Till then, buyers may not take part in the Andhra Pradesh auctions in large numbers. This season, the tobacco crop has suffered because of heavy rains, and farmers had to go in for replantation, especially in districts like East Godavari.

As a result, estimates say there will be no surplus crop this season in Andhra Pradesh. The Tobacco Board has set the crop size at 170 million kg, and the output may be less by 10-15 million kg, according to estimates. It may be at 150-160 million kg. However, the quality has not suffered much, and the out-turn of bright grades may be more this season. Farmers are therefore expecting high prices, especially in view of the high prices realised on the floors during the past two or three seasons.

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Published on February 24, 2011
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