Home Substantial portion The drop in tobacco production creates competition between buyers; prices hit historic high

The drop in tobacco production creates competition between buyers; prices hit historic high

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Even after the rains destroyed a significant part of the harvest this year, farmers have more than made up for the loss of volumes due to “historic” high prices, officials from the Tobacco Board have pointed out.

Even after the rains destroyed a significant part of the harvest this year, farmers have more than made up for the loss of volumes due to “historic” high prices, officials from the Tobacco Board have pointed out.

Tobacco fetches farmers a record price on Karnataka’s auction platforms; thanks to a sharp drop in production due to heavy rains this year.

Tobacco Board sources said The Hindu that the tobacco crop is expected to be in the range of 62 million kg, although the size of the crop for the year 2022-23 has been set at 100 million kg. ”But the farmers are more than happy. Prices exceeded their best expectations. Against an average price of ₹163 per kg they received last year, farmers have fetched ₹225 per kg so far this year,” sources at the Tobacco Board said.

Given the drop in production, competition among buyers, especially exporters, is at an all-time high, said BV Javare Gowda, president of the Federation of Flue Cured Virginia (FCV) Tobacco Growers’ Associations of the Karnataka. “The demand for tobacco is high in the global market as productivity has dropped even in Brazil and Zimbabwe, which are the two countries known to produce large quantities of tobacco in the world.”

The bidding begins

Auctions at the state’s ten platforms, including eight in Mysuru district alone, began in October this year and are expected to continue until February 2023. The harvested tobacco is cured and graded by the producers in their barns before being transported to the auction platforms.

Even after rains destroyed a substantial part of the harvest this year, farmers more than made up for lost volumes due to “historic” high prices, officials from the Tobacco Board have pointed out.

Premium tobacco prices reigned around ₹265 to ₹270 per kg. “Some farmers were holding back their produce in the hope that prices would cross the ₹300 mark,” Mr Gowda said.

anti-tobacco crusade

The move comes even as anti-tobacco crusaders campaigned for an end to tobacco farming by pressuring authorities to convince farmers to start growing alternative crops.

Tobacco is grown on about 75,000 hectares of land in Karnataka, mainly in Periyapatna, Hunsur and HD Kote taluks of Mysuru district. Over 80% of the VFC tobacco grown in the Mysuru region is an export grade that attracts buyers from around the world for its low nicotine and tar content.

Last year, tobacco farmers realized an average price of ₹163 per kg when production exceeded the crop size by 97 million kg to reach 104 million kg.