The tobacco auctions have kicked off on a positive note in the Prakasam district, Andhra Pradesh, much to the delight of farmers. The major cigarette manufacturers and select exporters have been actively participating in the auctions and vying to buy the bright grade varieties in the price range of ₹195 to ₹200 per kg.
The auctions are being held in four platforms, namely Ongole I, Velampalli, Kondepi in the Southern Black Soil (SBS) region and Podili in the Southern Light Soil (SLS) region. According to the Tobacco Board Production Manager Krishna Sri, who oversaw the auctions in Ongole on February 28, the auctions are proceeding swiftly with farmers receiving a good price of up to ₹200 per kg. He further added that the farmers have realized an average of ₹197.83 per kg for the 1,075 bales marketed till Tuesday. Krishna Sri is also the in-charge of the SLS and SBS regions.
However, traders have shown no interest in picking up the medium-grade variety and ungraded tobacco. There were no takers for moldy and funky leaf tobacco either. The big exporters like Alliance One International and Bommidala enterprises have started bidding in the auction from the beginning, unlike in the past when they used to adopt a wait-and-watch attitude due to delays in the confirmation of orders from their overseas counterparts. The farmers were asked to bring well-graded tobacco to the auctions to avoid rejections in the early phase.
More exporters are expected to enter the market in a big way in the Mysore region in a fortnight or so, once the auctions are over, according to the Indian Tobacco Association sources. However, the rising mercury has kept the farmers on tenterhooks as they fear discolouration and weight loss to the curing of the leaves. The crop regulator should speed up the auctions and complete them in about 100 days to realize a better price for their produce, said a group of farmers in Ongole.
The traders should offer at least a 20% increase in the prices for various grades this season, taking into effect the extensive crop damage caused by the rise in the cost of cultivation, said progressive farmer B. Ramanjaneyulu. Though the crop coverage went up to 85,000 hectares against 66,000 hectares in the previous year, the productivity was only between five to six quintals per acre this year as against about eight quintals last year.
The Tobacco Board has estimated the production to be 53.2 million kg in the SBS region and 48.2 million kg in the SLS region this Rabi. The crop regulator has fixed a crop size of 89.35 million kg limit for SLS and SBS regions.
The second phase of auctions will commence in Ongole II, Tangutur and Kanigiri in the Prakasam district and Kandukur I, Kandukur II, Kaligiri, and D.C. Palli in SPSR Nellore district on March 9.
Meanwhile, Income Tax department officials conducted extensive raids on tobacco traders’ houses and godowns in other areas, Ongole and Tangutur, as they have made big money with the market going northwards in the last couple of years, according to official sources.
