Financial Daily from THE HINDU group of publications
Friday, Jul 08, 2005
Agri-Biz & Commodities
Industry & Economy - Exports & Imports
Export enquiries prop up tobacco sales, prices
Guntur , July 7
TOBACCO auctions in Andhra Pradesh will come to an end on July 15. The average price realised by the end of auctions on Tuesday was higher by Rs 1.14 than last year and 139.14 million kg have been sold with sales recovering from a mid-season slump.
The Tobacco Board had authorised 108.16 million kg for the State, but it expected 146 million kg to come on to the auction platforms including unauthorised crop. Now, the total tobacco coming on to the platforms could go up to 151 million kg.
While the `brights' constituted 51 per cent of the total production, it commanded lesser price (between Re 1 and Rs 2 per kg) compared to last year, the Tobacco Board Executive Director, Mr J. Suresh Babu, said.
The `medium' and `low' grades made up for the loss, with traders going in for these after the auctions in Karnataka were completed. At one point of time, the farmers had raised a hue and cry seeking market intervention from the Tobacco Board and the State Government to stabilise the price, but the situation improved during the last 20 days.
Negotiations are on with Russia and China for exports next season and if it materialises , the demand for the black soil tobacco could increase, bringing better profits. Exports in April and May improved compared to 2004, which justifies the lifting of entire stock from the auction floors by buyers at all levels.
The produce from light soils of Andhra Pradesh, which once had the highest market, was the worst hit with the Northern Light Soils producers in Koyyalagudem, Jangareddigudem and Devarapalli losing 95 paise a kg compared to last year. The woody nature of the leaf had reduced the price.
Karnataka Light Soils produce was at the top of the demand charts world over, which had its own share of impact on the prices here.
Karnataka also sold 90 million kg this year against an authorised 74 million kg. The sowings and nursery activity has begun in Karnataka for the next season and a crop size of 72 million kg had already been fixed with the trade indicating a demand of 80 million kg.
Tobacco from the black soils was in great demand with the Central Black Soils commanding Rs 2.92 a kg more than last year and the average on Tuesday stood at Rs 32.05 compared to Rs 29.13 last year. The auctions have closed in Guntur and Keesara in CBS area and Bhadrachalam and Thorredu in Northern Black Soils, which saw an average increase of Rs 1.44 and closed at Rs 33.08.
The production committee meeting of the board for Andhra Pradesh will meet on July 23 here to fix the crop size for the coming season, to be followed by the registration committee meeting in another 10 days. The nursery activity will begin by August first week and sowings in September.
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