Speaking to FE from Guntur, the trade sources said that the tobacco merchants commenced negotiations with their counterparts in China to obtain export orders. "In all likelihood, the export orders will reflect in the current session," sources said.
About 25 years ago, China had banned tobacco imports from India following quality issues. As part of the trade revival process, Chinese official teams and traders visited the Tobacco Board in Guntur three months back to ensure the quality. They also visited the barns and processing yards, sources said.
As per the trade schedule, the Andhra trading floors are scheduled to open in February, while Karnataka season is just over. The tobacco that was brought to Karnataka markets could also be exported to China depending on the urgency of the orders, a trader said. "We are happy that China had vacated the import ban on the Indian tobacco into their country," traders said.
On the price front, traders are foreseeing a sharp rise of Rs 5 to Rs 6 per kg over the previous year quote. They opined that the China export orders would certainly stimulate the market on the price front. Average price quoted during the last trading session is at Rs 47.50 per kg, which may now rise over Rs 50 per kg, industry sources said.
The supply position also will be lowered since the production level has fallen below the authorised crop size of 158 million kg, sources adds.