Having stayed at the peak level of Rs 95 per kg on Monday, tobacco prices are showing receding symptoms. The market sources said that the prices fell to Rs 90 per kg on Tuesday at various platforms in the northern light soil region.
?Competition among the traders has pushed the price to Rs 95 per kg level. We are still to find the right price,? market sources said.
Speaking to FE, Ranga Rao, president, Virginia Tobacco Growers Association, said that the sudden spurt in the price is due to anticipated growth in export orders. ?We hope, these price levels continue during the trading season,? Rao said. Interestingly, the average price has registered a growth of 35% at Rs 67.50 per kg on Tuesday.
While the tobacco grown in southern black soils has reported Rs 80 per kg, northern black soils Rs 75 per kg, southern light soils Rs 85 per kg and central black soils at Rs 73 per kg, the market sources said.
Trading has picked up in all the 21 trading platforms in the state registering a cumulative auction of over 22 million tonne (MT) as on Tuesday, as against 3.5 MT last year. The Tobacco Board has authorised farmers to grow about 158 MT this year.
Considering that untimely rains have damaged a larger portion of the crop, industry sources anticipate low quality tobacco arrivals in the coming weeks. This would be the reason for the spurt in the price, they say. The traders feel that price will gradually stabilise at Rs 65 to Rs 70 per kg, as the trading session moves on. ?The medium and low quality tobacco being sourced for domestic market is yet to arrive,? market sources said.