Tag: India

  • India: ITC Shares Fall With Covid Restrictions

    India: ITC Shares Fall With Covid Restrictions

    Photo: Seemanta Dutta | Dreamstime.com

    Shares of ITC fell nearly 3 percent after the company warned that lockdown restrictions could cause supply chain disruptions soon, according to Reuters.

    ITC’s statement came as its cigarette business barely staged a recovery from last year’s lockdown, according to Reuters. March quarter revenue rose 14 percent to INR58.50 billion ($799.1 million). Cigarette volumes were short of pre-Covid-19 levels toward the end of the year.

    “ITC’s cigarette division posted a strong outperformance versus peers during the year, indicating market share gains. However, fresh restrictions in urban and rural markets may delay cigarette volume recovery going ahead,” the Reuters article states.

    Limited lockdowns were reintroduced following surges in Covid-19 infections in April and May. Analysts at Prabhudas Lilladher stated that the lockdowns are only “temporary hiccups,” according to Reuters, and they expect the first quarter to pick up.

  • Tobacco Auctions Suspended Due to Covid

    Tobacco Auctions Suspended Due to Covid

    Photo: Taco Tuinstra

    The Tobacco Board of India has suspended auction sales for a week due to the rapid spread of Covid-19 cases, reports The Times of India.

    “With the situation going from bad to worse, we have decided to put off the auctions in view of the welfare of all those involved in the process, including growers, traders and officials,” said Tobacco Board Executive Director Addanki Sridhar Babu.

    Sixty-eight employees of the Tobacco Board have reportedly tested positive for Covid-19, and one died due to the coronavirus during the auction season.

    To date, Indian farmers have sold about 27 million kg against the expected total production of 110 million kg during the current season. Although the board authorized growers to produce about 115 million kg, production fell short due to weather conditions. Nonetheless, board officials noted that farmers produced “fine” quality leaf.

    Growers fetched an average price of INR161.80 ($2.21) per kg compared with INR142 per kg last season.

    The board will decide on May 24 whether to resume auction sales.

  • Indian Farmers Worried About Tobacco Prices

    Indian Farmers Worried About Tobacco Prices

    Photo: Tobacco Reporter archive

    Tobacco farmers in Andhra Pradesh are concerned about declining tobacco prices, reports The Hindu.

    When the auctions opened, buyers were offering more than INR180 ($2.44) per kg for bright grade varieties in the country’s most prominent tobacco-growing province. Now, the same varieties are fetching INR170 per kg at best, a group of farmers at the Vellampalli auction platform said.

    To date, only 7.26 million kg have been traded against an estimated production of more than 70 million kg in the traditional tobacco-growing areas under the purview of the Southern Light Soils (SLS) and the Southern Black Soil (SBS) auction platforms. Tobacco production was also impacted by unseasonal rains in the Nellore and Prakasam districts.

    In SBS auction platforms, the average price realized for the 3.55 million kg marketed so far has dropped to INR170.95 kg now. In SLS auction platforms, the 3.71 million kg marketed to date fetched an average price of INR173.30 per kg, according to the Tobacco Board.

    Vellampalli II Tobacco Growers’ Association President N. Chimpriya called for intervention by the State Trading Corp., pointing to the foreign exchange traditionally earned by the tobacco sector.

    Last year, Indian tobacco farmers incurred significant losses due to a prolonged Covid-19 lockdown. Tobacco growers fear disruption this year, too, as India struggles with a steep surge in infections.

  • Board Authorizes 97 Million kg for Karnataka

    Board Authorizes 97 Million kg for Karnataka

    Photo: Tobacco Reporter archive

    The Tobacco Board of India has authorized a 2021–2022 crop of 97 million kg for Karnataka, 9 million kg more than in the previous growing season, reports The Times of India.

    “We have decided to fix the crop size of Karnataka at 97 million kg keeping in view the demands of growers as well as traders,” said board Chairman Raghunatha Babu, adding that the board had also taken into consideration global demand.

    The board had originally authorized a 99 million kg crop for Karnataka in 2020–2021. However, after considering the seriousness of the Covid-19 pandemic, it reduced the crop size to 88 million kg.

    Some analysts expressed surprise at the crop size increase, given that global demand for tobacco has slipped in the wake of the pandemic.

    Tobacco growers who switched to producing ginger following the crop size reduction reportedly suffered heavy losses, increasing pressure on the board to increase the crop size for 2021–2022.

    Meanwhile, tobacco growers in Andhra Pradesh threatened to stall auctions from Monday if there is no marked improvement in the prices offered for their produce, according to a report in The Hindu.

    Due to the rising number of Covid-19 cases and uncertain global demand situation, exporters have adopted a wait-and-see approach, citing a lack of confirmed orders.

    “We were hoping to recoup the losses incurred last year as the virus-induced lockdown coincided with the peak marketing season, said farmers’ representative Mareddy Subba Reddy.

    “We will not hesitate to stall the auction from next week if the market continues to remain lackluster, said V.V. Prasad, a farmer’s welfare association leader at the Ongole II auction platform.

    To date, Andhra Pradesh famers have marketed only 12.5 million kg of their 70 million kg crop. The 6.5 million kg Southern Light Soils tobacco sold earned a price of INR167 ($2.23) per kg while the 6 million kg Southern Black Soils tobacco sold for INR165 per kg, according to the Tobacco Board.

  • Modi Asked to Withdraw Indian Tobacco Bill

    Modi Asked to Withdraw Indian Tobacco Bill

    Photo: Tobacco Reporter archive

    A prominent Indian farmers group has asked Prime Minister Narendra Modi to withdraw a proposal to amend the law regarding cigarettes and other tobacco products, saying it will create hardship for tobacco growers, reports CNBC.

    Proposed by the Ministry of Health, the Cigarettes and Other Tobacco Products Act (COTPA) Amendment Bill 2020 disallows retail sales of loose cigarettes, prohibits sales of tobacco products to persons below 21 years and restricts in-shop advertising and promotion, amongst other provisions.

    The Federation of All India Farmer Associations (FAIFA), which represents farmers and farm workers of commercial crops across Andhra Pradesh, Telangana, Karnataka and Gujarat, said the bill will significantly boost the illicit cigarette business in India.

    FAIFA President Javare Gowda said the amendments will ”terrorize retailers and traders and they would not want to engage in the sale of legal cigarettes. Criminal syndicates, he cautioned, will gain ground and flood the Indian market with illicit cigarettes.

    Since these illicit cigarettes do not use tobacco produced by Indian farmers, the result would be loss of earnings and livelihood of millions of tobacco farmers who are dependent on the crop in the country, he added.

  • India Mulls Crackdown on Tobacco

    India Mulls Crackdown on Tobacco

    Photo: Taco Tuinstra

    India’s health ministry wants to ban public smoking, prohibit the sale of loose cigarettes and increase the minimum smoking age from 18 to 21, reports The Economic Times.

    Earlier this week, the Union Health Ministry published the draft Cigarettes and Other Tobacco Products Amendment Act, which if implemented in its entirety could have long-term ramifications for the cigarette industry.

    However, some analysts believe the government’s draft policy is ambitious and may not be fully implemented.

    “In India, there are rules out there for many things, but implementation will be a major challenge,” said Abneesh Roy, executive vice-president at Edelweiss Securities.

    Tobacco companies operating in India’s $12 billion cigarette market are likely to raise objections before the public consultation period of the proposal ends on Jan. 31.

    “Some of the measures are very extreme and problematic,” one tobacco industry executive told Reuters. A second executive said concerns around the impact on employment and how farmers could be affected will also be shared with the government.

    India had proposed sweeping changes to its tobacco-control law in 2015 as well but the proposal was dropped following protests from the tobacco industry.

    Shares of market leader ITC tanked 2.9 percent on Wednesday to INR205.35 ($2.80) on the national stock exchange. Prior to this correction, shares of the soap-to-tobacco maker had risen 30 percent since November as analysts saw signs of recovery in the cigarette and non-cigarette fast-moving consumer goods businesses.

  • India Bans Per-Stick Bidi and Cigarette Sales

    India Bans Per-Stick Bidi and Cigarette Sales

    Photo: Denis Shevyakov

    The state health department in India has banned the sale of loose cigarettes and bidis to help stop the spread of Covid-19 and to discourage smoking, reports Mumbai Mirror.
     
    Vendors will have to sell full packs rather than single sticks. The police department and local self-government bodies are tasked with enforcing the ban.
     
    Tobacco laws state that 85 percent of tobacco packaging must be health warnings, but when consumers are buying single sticks, they are not seeing these warnings. Officials are hoping requiring the sale of whole packs will discourage smokers; many tobacco consumers in India cannot afford whole packs.

  • Indian Committee Mulls Foreign Investment

    Indian Committee Mulls Foreign Investment

    Photo: Taco Tuinstra

    A parliamentary panel in India has proposed foreign direct investment (FDI) in tobacco cultivation and cigarette manufacturing for exports

    Tobacco-related FDI is currently restricted in India.

    Headed by V. Vijaysai Reddy, the Upper House’s standing committee on commerce recommended 100 percent FDI in tobacco cultivation on the lines of tea, coffee and rubber with the safeguard that tobacco produced with the help of foreign capital should be marketed at auction.

    In case of cigarette manufacturing, the panel has backed overseas investment on the condition that it takes place only in special economic zones and that the products are sold outside of India.

    Lawmakers are also mulling proposals to set up “export only” tobacco farms to generate revenue.

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  • India Delays New Health Warnings

    India Delays New Health Warnings

    Image: PixaBay

    The health ministry of India has deferred implementation of its new pictorial health warnings for tobacco products. The new warnings will be enforced from Dec. 1 instead of Sept. 1.
     
    Public health advocates criticized the postponement.
     
    “By delaying the next round of pictorial warnings on tobacco products, the health ministry is not only contradicting its own advisory to hold back tobacco use during the Covid-19 pandemic, it is adversely impacting the motivation of tobacco users to quit while being in conducive environment socially,” said Rakesh Gupta, a consultant working for Tobacco Cessation.
     
    Some 270 million adults in India consume tobacco, which is blamed for more than 1.3 million premature deaths every year.
     
    The Global Adult Tobacco Survey 2016–17 showed that 62 percent of cigarette smokers and 54 percent of bidi smokers said they had thought of quitting because of the mandatory 85 percent pictorial warnings on packs. Forty-six percent of smokeless tobacco users thought of quitting because of warnings on smokeless tobacco products.

  • India Specifies New Health Warnings

    India Specifies New Health Warnings

    Photo: Taco Tuinstra

    India’s Ministry of Health on July 23 issued new sets of specified health warnings with enhanced pictorial images to be printed on all tobacco products. The amended rules will be applicable from Dec. 1, 2020, and will be in force till 12 months thereafter.

    In a statement, the Health Ministry said, “All tobacco products manufactured or imported or packaged on or after Dec. 1, 2020, shall display the first set of images while the second set of images will be displayed by the tobacco products manufactured or imported or packaged on or after Dec. 1, 2021. Any person engaged directly or indirectly in the manufacture, production, supply, import or distribution of cigarettes or any tobacco products shall ensure that all tobacco product packages shall have the specified health warnings exactly as prescribed.”

    Violators risk imprisonment or fines as prescribed in Section 20 of the Cigarettes and Other Tobacco Products (Prohibition of Advertisement and Regulation of Trade and Commerce, Production, Supply and Distribution) Act of 2003.