Tobacco board expects 10% rise in exports

The Tobacco Board, which regulates production of the commodity with regard to the domestic and export markets, expects a 10 per cent rise in the export of tobacco and tobacco products in the current financial year.

"This year, there is an increase in demand for Indian tobacco in the international markets," board Chairman G Kamala Vardhana Rao told Business Standard.

Accordingly, the board had restored its original ceiling on the crop size at 170 million kg (mkg) for Andhra Pradesh and 100 mkg for Karnataka, the main tobacco growing states, for the current crop season. Last year, the crop size was fixed at 162 mkg and 98 mkg for the two states, respectively.

This apart, the board has sought permission from the Union ministry of commerce for distribution of last year's left over crop of 1.76 mkg to the tobacco growing regions equally. Besides the two southern states, tobacco is cultivated in small amounts in Maharashtra and Odisha.

In the past two years, there had been a marginal decline in exports. In 2011-12, India had exported 240,395 tonnes of tobacco and tobacco products worth Rs 4,100 crore. This represented a five per cent decline in volume and three per cent decline in value compared to the previous year's exports. Even in 2010-11, there had been an year-on-year decline of three per cent in quantity and four per cent in the value of exports.

For the quarter ended June 2012, export of tobacco and tobacco products stood at 60,121 tonnes, valued at Rs 1,083 crore. Compared with the corresponding quarter last year, the volume of exports (63,614 tonnes in June 2011) had declined by five per cent, but the value (Rs 1,023 crore in June 2011) increased by six per cent. The increase in value was attributed to the depreciation of the rupee against the dollar.

Nevertheless, Rao said the quantum of exports would pick-up from now. Tobacco auctions would start next month in Karnataka, while they would be held in Andhra Pradesh from the last week of February 2013.

Europe is the main importer of Indian tobacco, accounting for 51 per cent of total exports from the country last year. The other major importing regions were South and South East Asia (19 per cent of exports), Africa (14 per cent), North and South Americas (nine per cent) and West Asia (seven per cent).