Prices stall in Karnataka

The Tobacco Board of India has been asked to take the steps necessary to address the poor domestic and overseas demand for the flue-cured tobacco currently being auctioned in the state of Karnataka, according to a story in the latest issue of the BBM Bommidala Group newsletter.

The call was said to have been made by Javare Gowda, president of the VFC Tobacco Growers of Karnataka, though it wasn’t spelt out what sorts of steps should be taken.

At the time the newsletter was issued, growers in Karnataka were said to have sold 40 million kg of flue-cured tobacco for an average price of Rs145 per kg.

The auctions so far had comprised sales of 14 million kg of low-grade leaf at an average price of Rs120 per kg; 18 million kg of medium grades for an average of Rs144 per kg; and [presumably] eight million kg of bright grades for an average of Rs161 per kg.

The auction season started on a high note in September with 2.4 million kg being sold during the first eight days of sales and with the average price going above Rs150 per kg within the first 2-3 weeks.

But since then, demand has fallen off and prices have declined, causing growers to become concerned.

A Board official was quoted as saying that, more than three months after the start of auctions, as much as 50 million kg of tobacco was yet to be sold.

And this is a relatively small crop. The Board had fixed the 2018-19-season volume at 99 million kg, but heavy rains in the region are believed to have reduced the harvest to 90 million kg.