The Hindu : Andhra Pradesh News : Tobacco auctions yet to pick up

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Wednesday, Mar 04, 2009
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Andhra Pradesh

Andhra Pradesh

Tobacco auctions yet to pick up

Ramesh Susarla

Stalemate continues over initial price to be offered to flue cured variety

GUNTUR: Tobacco auctions, which began on February 27, are yet to pick up, thanks to the continuing stalemate on initial price to be offered for Flue Cured Virginia (FCV) tobacco on Northern Light Soils (NSL) in and around Jangareddygudem.

The auctions had a shaky start and were later suspended with farmers refusing to offer bales at Rs. 90 per kg suggested by traders. High tobacco yield in Andhra Pradesh was a cause for concern to both farmers and tobacco board officials.

Karnataka scene

Considered the premium variety, FCV fetched an overall average price of Rs. 110 per kg on Karnataka platforms, where auctions nearing an end. Currently prices are ruling at Rs. 156 a kg. But, major buyers are refusing to offer more than Rs.100 a kg saying that the Tobacco Board had recommended that anything beyond that amount need not be paid. The NLS farmers expect at least that price to begin with, but buyers are unenthusiastic.

Cause for concern

The overall production in Andhra Pradesh was pegged at 220 million kg, which was the highest-ever grown. This was a worrying factor for the board, as it should ensure proper price to the farmers who got an amount of Rs.100 a kg during last season’s auctions, which ended at an average price of Rs.85 a kg. The total auctioned quantum last year was 165 million kg.

Tobacco Board Chairman J. Suresh Babu told The Hindu on Tuesday that a misinformation campaign was being run by some “greedy buyers” as the minimum price set at 12 other platforms, now functional, the buyers were asked to begin at Rs.100 a kg. The auctions on black soil platforms in CBS and SBS areas will begin on March 6 and the Board suggested Rs.90 as the beginning price.

The Tobacco Board was watching the situation and mulling tough action on buyers and farmers if they did not resolve the issue amicably.

The farmers had the right to refuse the offer if the price being offered by buyers was not to their liking. The board gives licence to traders for buying and exporting and also to farmers to grow the crop.

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