Indonesian flue-cured prices decimated as growers face production cost increase

Tobacco growers in the West Nusa Tenggara province of Indonesia say that low demand and declining prices for flue-cured are threatening their livelihoods, according to a story in The Jakarta Post.

The farmers, who are expecting to make big losses on this year’s harvest, are asking the provincial administration to intervene in the market.

The price of flue-cured currently ranges between Rp3,000 (US31¢) and Rp5,000 per kg, down from between Rp30,000 and Rp35,000 per kg last year.

“The companies are manipulating the prices as they wish,” said Lalu Musdar, a farmer from Janapria, Central Lombok. “We want the governor to urge them to buy tobacco from us at a fair price.”

Musdar, who planted flue-cured on more than 1.3 ha of his farm in Janapria, said he would suffer losses of up to Rp70 million if he failed to sell his tobacco.

Production costs have risen this year and Musdar said that farmers might make a little profit if the price were Rp30,000 per kg. “For our production expenses, we borrowed from the co-operative and loan sharks at a high interest rate,” Musdar added.