The Hindu : Karnataka News : Brisk sale of tobacco at auction platforms

Online edition of India's National Newspaper
Friday, Nov 05, 2004

Karnataka

Karnataka

Brisk sale of tobacco at auction platforms

By Laiqh A. Khan

MYSORE, NOV. 4. Despite an increase in the crop size of tobacco for Karnataka from 62 million kg last year to 74 million kg this year, the commodity is commanding a better price at the auction platforms across the State compared with last year.

Sources in the tobacco industry say that the price of tobacco has registered an average increase of Rs. 8 to Rs. 10 a kg for all the three grades. The increase in tobacco rates has been attributed to the growing international demand for Virginia Flue-Cured (VFC) variety grown in Karnataka, particularly Mysore district.

The superior grade of tobacco, which fetched farmers Rs. 55 a kg last year, is selling at Rs. 65 a kg this year, and the medium grade, which accounted for almost half of the produce, between Rs. 40 and Rs. 55 a kg. The lowest grade of tobacco, the price of which plummeted to Rs. 12 a kg last year, is selling at a minimum of Rs. 20 a kg, sources say.

Apart from an increase in prices, the volume of the tobacco trade at the auction platforms of Tobacco Board has reported a dramatic rise this year. Tobacco farmers are bringing thousands of bales of tobacco to the nine auction platforms set up by the Tobacco Board across the State each day, and rough estimates suggest that at least one million kg of tobacco is traded each day.

Since September 3, when the auction season began, 27 million kg of tobacco has been sold at the nine auction platforms. "By this time last year, barely 8 million kg of tobacco had been sold,'' sources in the tobacco industry say. "If the trade continues at the same pace, the auction season will end by January end or early February against the scheduled close in March 2005,'' they point out.

Poor facilities

But, the arrival of a large quantity of tobacco at the auction platforms has exposed the brittle infrastructure at the platforms. Thousands of bales of tobacco are being unloaded every day and there is lack of space. The number of employees deployed by the board to handle the transaction is insufficient.

Farmers in H.D. Kote taluk of Mysore district have complained that tobacco worth lakhs of rupees was destroyed because of the absence of proper storage at the auction platform.

Tobacco farmers from Periyapatna taluk which accounts for nearly 30 per cent of the State's tobacco output, have made out a case for setting up two additional platforms.

The Karnataka State Virginia Flue-Cured Tobacco Growers' Association has urged the Tobacco Board to take steps to establish additional auction platforms and increase the staff deployed at the platforms.

The association president, B.V. Javare Gowda, has said the decision to set up auction platforms and appoint personnel to manage transactions was taken in 1975 when the State was producing only 12 million kg of tobacco. "Today, tobacco production has reached 75 million kg and it is difficult to continue with the same infrastructure.''

According to the association, tobacco from Karnataka is exported to about 40 countries, including many in the European Union. Last year, India earned Rs. 1,162 crores in foreign exchange from tobacco exports.

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