Tobacco Board sources said that as against the statutorily set target of cultivating 40 million kgs in an area of 27,589 hectares, the growers had raised the crop in 54,235 hectares, resulting in upward production of 54 million kgs, leaving a surplus stock of about 14 million kgs lying with the growers for marketing. This would be after making estimates of 30 million kgs of low grade variety for exports and 11 million kgs for domestic consumption, sources added.

The sources, however, said the board was confident of marketing most of the low grade virginia tobacco stocks in Karnataka following the recent budget by not enhancing excise duty on non-filter cigarettes of length 61 to 69 mm and on filter cigarettes with a view to help the industry absorb higher volume of lower grades andadditional quantities of medium grades.

The production of minimum quantity of low grade virginia tobacco in Andhra Pradesh in the current season which is said to be short of trade expectations, would result in absorption of more quantity of surplus low grade varieties by the domestic market.

After exports of low grade varieties mainly to Commonwealth of Independent States (CIS) and east European countries, the anticipated surplus stocks would come down leaving a quantity of about five million unsold stocks left in the state, before the next crop arrives into the market, board forecast.

The sources said that excess area of plantation and the consequent surplus production was due to the twin factors of the registered farmers with the tobacco board cultivated in more area than the authorised and the entrance of unregistered farmers taking up cultivation due to good returns on the crop last year.

Following the trend of unauthorised cultivation, the Union commerce ministry in consultation with theexporters and manufacturers, at a preliminary meeting held recently had decided to limit the production of virginia tobacco in Karnataka to about 40 million kgs annually in the next two years.

The board, in consultation with the traders, had also decided to fix minimum guaranteed price of Rs 39.50 per kg for the next Karnataka crop of 1999 season.

The tobacco board has estimated unsold flue cured virginia tobacco stocks of 25 million kg in the entire country at the end of January 1999, inclusive of last season quantities.