Date:27/07/2004 URL: http://www.thehindubusinessline.com/2004/07/27/stories/2004072700771200.htm

Back AP tobacco sales drawing to a close

Our Bureau

Guntur , July 26

TOBACCO auctions in Andhra Pradesh are nearing completion and they are expected to be closed by the end of the month or in the first week of August.

Till now, according to the officials in the Tobacco Board, 140 million kgs of tobacco has been sold in the State at an average price of Rs 35.54 a kg and there may still be 5-6 million kgs left over with the farmers.

There is a huge surplus in the 2003-2004 crop season in comparison with the 2002-2003 season in the State. Against the authorised crop size of 111 million kg, farmers have grown nearly 145 million kg or more during 2003-2004, depressing the prices on the auction floors.

The surplus during 2002-2003 season was manageable, as farmers had grown 127.67 million kg against the authorised crop size of 111 milllion kg and they could get Rs 34.83 per kg.

In particular, the farmers in the southern black soils (Prakasam and Guntur) have grown a huge surplus. Against the authorised crop size of 31.56 million kg, they have grown as much as 50 million kg.

The farmers in the northern and central black soils, however, have shown greater discipline. In fact, the production in these areas is less than the authorised one. There has been a marginal increase of 3-4 million kg in the northern light soils and of 6 million kg or so in the southern light soils.

The trade has been contending that the black soil tobacco should be reduced as there is not much demand for such tobacco in the market and the Indian Tobacco Association (ITA), the trade body, has pleaded at the recent production committee meeting reduction in the crop size for 2004-2005 season to less than 100 million kgs.

However, the board has finally prevailed upon the trade and the crop size for coming season in the State has been pegged at 111 million kgs, as during the last season.

Rejecting the contention of the trade, Mr Ch. Ranga Rao, a member of the board representing the farmers, has said the trade has been encouraging the Karnataka farmers to grow more in recent years and absorbing all the crop there at high prices, but is seeking to bring down the crop in Andhra Pradesh.