Tobacco producers are concerned as the second wave of COVID triggers a price correction

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Even as the tobacco auction started promisingly in mid-March, farmers are now keeping their fingers crossed as the second wave of the coronavirus pandemic, at an expected time, has resulted in a correction in the prices of various tobacco varieties to offset their losses that were due to bleaker last year Markets have arisen due to prolonged lockdown.

Buyers offered more than £ 180 per kg for the light grades varieties when the auction platforms opened. Now the same varieties are fetching £ 170 per kg at best, a group of farmers said on the Vellampalli auction platform. The main buyers of the products that find their way onto the world markets have been shy of the auction recently because of the health concerns with the increase in the number of infections. “We’re trying our best to increase the number of bales traded every day by at least 100. 400 to 500 bales are currently being traded due to sluggish market conditions, ”says Regional Manager D. of Southern Light Soil (SLS). Venugopal told The Hindu.

Boring business

Farmers fear disruption to the tobacco trade this year as the coronovirus has already triggered a lockdown in some parts of the country. There is still a long way to go, as only 7.26 million kg have been traded to date, while production of over 70 million kg has been estimated in traditional tobacco growing areas under the supervision of SLS and Southern Black Soil auction platforms. The unusual rainfall during the rabi season over several periods also affected tobacco production in Nellore and Prakasam districts as farmers had to fill in gaps as the rain destroyed crops that were planted early.

Market intervention

“The center should put State Trading Corporation (STC) into service as the tobacco sector makes a good deal of foreign exchange. As last year, the state government should instruct the markfed to step in to create a boost in the market, ”said N. Chimpriya, President of the Vellampalli II Tobacco Growers’ Association.

The auctions got off to a promising start with the price of the F1 class rising to £ 184 per kg. Only 20 days have passed since the platforms opened and the market is now in correction mode. On SBS auction platforms, the average price for the previously marketed 3.55 million kg has fallen to 170.95 kg. According to Tobacco Board sources, the 3.71 million kg previously marketed on SLS auction platforms achieved an average price of £ 173.30 per kg.

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