Tobacco prices soar in Andhra auctions

Prices of flue-cured tobacco (FCV) have climbed to Rs 97.80 a kg at 20 auction centres of the Tobacco Board in Andhra Pradesh on the 45th day of auctioning. The season's highest price was grabbed by a farmer of northern light soils (NLS).

Last year, the average prices were hovering around Rs 47.47 a kg. As against the authorised crop of 149.91 million kg, farmers are estimated to have produced 164.47 million this year. So far, 53.25 million kg FCV crop has been sold at the auctions at an average price of Rs 72.14 a kg.

The season's highest per kg prices for tobacco were: Rs 81.80 for southern black soil (SBS) tobacco; Rs 85.00 for central black soil (CBS) crop; Rs 91.20 for southern black soil (SBS) crop; Rs 91.40 for southern light soil (SLS) crop and Rs 97.80 for northern light soil tobacco. Prices are expected to further go up depending on the global tobacco situation.

J Suresh Babu, chairman, Tobacco Board, said the present floor prices were at par with those paid to farmers in Zimbabwe and Brazil.

"With global tobacco supply falling short of the demand by 75 million kg and cigarette manufacturers looking towards India for supply, the rise in prices was expected," said J Suresh Babu.

He said that as the European countries were phasing out subsidies for tobacco cultivation, farmers there were switching to other crops on a large-scale, thus creating a shortage.

In India too, farmers are losing charm in tobacco cultivation. The crop area last season came down by 2,000 acres.