Karnataka tobacco auctions see brisk trade

Price range between Rs 102-108 a kg.

The Tobacco Board has marketed 30 million kg of tobacco, a little over one-third of the total crop size of the authorised 96.52 million kg fixed for Karnataka, in the last two months of auctions.

Currently, the prices are ruling 90 per cent higher than the last season, at Rs 104.67 a kg as against Rs 56.65 a kg fetched during the same period last year.

“All the 10 auction platforms in the state are witnessing brisk business and steady volumes as the auctions enter third-month of this season (crop season 2008-09),” said Aziz-ul-Haq, regional manager, Tobacco Board. Normally, the tobacco marketing period starts in September and ends in March. “Steady volumes have not dampened prices,” he added.
 

DECELERATING Quantity, prices fetched at different auction platforms
Auction platforms	Quantity (in mn kgs)	Avg Price (in Rs)
HD Kote	2.61	102.45
Hunsur-I	3.10	107.13
Hunsur-II	2.26	105.67
Periyapatna-I	3.68	103.87
Periyapatna-II	2.78	104.01
Periyapatna-III	3.05	102.62
Kampalapura-I	3.58	105.25
Kampalapura-II	2.56	104.41
Ramanathpura-I	3.19	102.43
Ramanathpura-II	2.93	102.87

As area under tobacco is coming down drastically, the commodity grades grown in Karnataka have found a sudden demand. In Karnataka, tobacco is grown in light soil under rain-fed conditions which have neutral quality.

“Neutral filler tobacco does not spoil the brand or its taste, hence, it is in demand to be extensively used as a filler in major brands,” said Aziz-ul-Haq.

During this season, tobacco prices in October witnessed a marginal dip due to various reasons like the global financial crisis and the failure of traders to secure a firm commitment. The current prices are 80-90 per cent more than the last crop season rates.

Price realisation for tobacco growers has been good this season (2008-09), as they are getting average price between Rs 102 and Rs 108 a kg as compared to Rs 59.23 a kg in 2007-08 season. A total of 29.78 million kg have been marketed with an average price realisation of Rs 104.07 a kg as of November 8.

Grade wise sales: Bright Grades quantity marketed 9.35 million kg at an average price of Rs 118.84 per kg, Medium Grades were 14.14 million kg at Rs 106.59 and 6.29 million kg of Low Grades at Rs 76.42.