Tobacco farmers in the traditional tobacco-growing districts of Andhra Pradesh are optimistic as traders have purchased bright and medium quality varieties offering premium rates at ongoing auctions in the southern light soil regions ( SLS) and Southern Black Soil (SBS).
During the 31-day auction on the platforms of Ongole I, Kondepi, Vellampalli, Podili, DC Palli, Kandukur I and Kandukur II, and the 19-day auction on the platforms of second phase of Ongole II, Tangutur, Kaligiri and Kangiri in Nellore and Prakasam districts, brilliant grade varieties of F1 and F2 fetched premium price of up to ₹185 per kg.
“Tobacco of all grades is on its way to market. Traders pick up even the ripe ones, as well as the green ones.” After witnessing the auction performance in Kandukur, SLS Regional Manager D. Venugopal remarks, “There are no takers for low volume and NOG types.” He says the rate of rejection is currently less than 10%.
Bright grade varieties fetched a price of 165 to 185 per kg, while medium grade types fetched a price of 150 to 160 per kg.
According to Tobacco Board sources, even lower quality varieties fetched a higher price of 120-140 per kg following the return to normal.
Over the past two years, the coronavirus has led to a drop in demand for tobacco.
Despite the fact that tobacco auctions started in late March, farmers were able to sell 19.73 million kg of tobacco at an average price of 179.60 per kg. In the same period of 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 including farmers and traders, and that trading had to be halted due to lockdown-like curbs.
Some exporters stay away
“Some exporters have stayed away from the market because they fear for global demand in the aftermath of the Russian-Ukrainian conflict,” complained a group of farmers on the Ongole II auction platform.
They wanted the crop regulator to ensure that exporters who presented approval at the time of crop size determination were able to participate fully in the market.
This year, farmers are dealing with more intermediate and lower quality types. VV Prasad, a farmer leader, told traders that the yield of the grade had been far from adequate following heavy rains in November and unseasonable rains once again in January.
This year, the brilliant quality accounted for 40% of the overall production of the two zones, against 60% the previous year. The mid and lower quality cultivars each accounted for 30% of the overall yield of 68 million kilograms.
The agricultural regulator has increased the size of the crop to 80 million kg in anticipation of increased demand. In both regions, it fell by 12 million kg, contrary to forecasts.
Call to Markfed
Meanwhile, farmers led by Tobacco Board member Mareddy Subramanyeswara Rao have pleaded with the Markfed, which made an unprecedented intervention in the market two years ago at the request of Chief Minister YS Jagan Mohan Reddy to avoid the distress sale, not sell off the stocks she held at this stage, fearing lower market prices for lower quality varieties.
First published: April 25, 2022, 02:37 IST