The Tobacco Board has agreed to increase the minimum guarantee price by Rs 4 a kg to farmers of F1 Grade from the current Rs 120. This was decided after board Chairman G Kamalavardhana Rao held meetings with representatives of farmers and traders.
Farmers of southern light soils in Prakasam district, who have cultivated flue-cured virginia, have been insisting on remunerative price. However, traders were offering only Rs 112.98 a kg as against Rs 119.9 in the 2010 season.
According to traders, prices in global markets have come down due to surplus output in the last two years and there was not much demand for Indian tobacco in international markets like Brazil and Zimbabwe.
The highest price so far offered for the fine quality tobacco stood at Rs 120 a kg, while the lowest was Rs 90 a kg. “This year, there is a shortage of 15 million kg of tobacco in Andhra Pradesh against the permitted crop of 170 million kg, due to the untimely rain in December 2010,” Rao said.
The board has been planning to open seven more auction platforms in Andhra Pradesh and Karnataka for the next season. The board has 20 platforms in Andhra and 11 in Karnataka. It has sent proposals to the Centre to open four new platforms in Andhra and three in Karnataka.
