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Tobacco Farmers in Andhra Pradesh Happy After Receiving High Price

Despite the fact that the tobacco auctions began late in March, the farmers were able to sell 19.73 million kg of tobacco at an average price of 179.60 per kg.

Shruti Kandwal
Tobacco Farming
Tobacco Farming

Tobacco farmers in Andhra Pradesh's traditional tobacco-growing districts are optimistic, as merchants swooped up bright and medium grade varieties providing premium rates during ongoing auctions in the Southern Light Soil (SLS) and Southern Black Soil (SBS) regions.

During the 31-day auction in the platforms of Ongole I, Kondepi, Vellampalli, Podili, D.C. Palli, Kandukur I and Kandukur II, and 19-day auction in the second phase platforms of Ongole II, Tangutur, Kaligiri, and Kangiri in the districts of Nellore and Prakasam, bright grade varieties of F1 and F2 fetched a premium price of up to ₹185 per kg.

"Tobacco in all grades is on the way to the market. The traders pick up even ripe ones, as well as greens.” After witnessing the performance of auctions in Kandukur, SLS regional manager D. Venugopal remarks, "There are no takers for the unbulky and NOG types." He says that the rejection rate is currently less than 10%.

Price Range

The brilliant grade varieties obtained a price of 165 to 185 per kg, while the medium grade types garnered a price of 150 to 160 per kg.

According to Tobacco Board sources, even low-grade varieties have gotten a higher price of 120 to 140 per kg as a result of the return to normalcy.

In the previous two years, the Coronavirus has resulted in lower tobacco demand.

Despite the fact that the tobacco auctions began late in March, the farmers were able to sell 19.73 million kg of tobacco at an average price of 179.60 per kg. During the same period the previous year, they were only able to sell 13 million kg at an average price of 149 per kg, after COVID-19 caused sleepless nights for all stakeholders, including farmers and dealers, and trading had to be interrupted due to lockdown-like curbs.

Some exporters stay away

"Some exporters have stayed away from the market because they are apprehensive about global demand in the aftermath of the Russia-Ukraine conflict," a group of farmers on the Ongole II auction platform complained.

They wanted the crop regulator to guarantee that those exporters who had submitted authorization at the time of crop size fixation were able to participate fully in the market.

This year, farmers are dealing with a greater number of middling and low-grade types. V.V. Prasad, a farmer leader, revealed to the traders that the grade out-turn had been far from adequate in the aftermath of heavy rains in November and unseasonal rains once again in January.

This year, the brilliant grade accounted for 40% of the overall production in the two areas, compared to 60% the year before. The middle and low-grade cultivars each accounted for 30% of the overall 68 million kilogram yield.

The agricultural regulator boosted the crop size to 80 million kg in anticipation of increasing demand. In both regions, it declined by 12 million kg, contrary to forecasts.

Plea to Markfed

Meanwhile, farmers led by Tobacco Board member Mareddy Subramanyeswara Rao pleaded with the Markfed, which had made a first-of-its-kind intervention in the market two years ago at the behest of Chief Minister Y.S. Jagan Mohan Reddy to avoid distress sale, not to offload the stocks held by it at this juncture, fearing a drop in market prices for low-grade varieties.

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