Andhra Pradesh Tobacco Market Shows Signs Of Recovery As Buyer Competition Rises

The FCV tobacco market in Andhra Pradesh is showing signs of recovery, with stronger buyer participation and a significant decline in bales receiving no bids, Agriculture Minister K. Atchannaidu said on Sunday.

The minister said the state government was taking measures to ensure better market conditions and remunerative prices for tobacco growers, particularly as farmers continue to face the impact of surplus production during the current season.

As of September 4, around 8.65 crore kg of Flue-Cured Virginia (FCV) tobacco had reached auction platforms over 132 auction days. Against an authorised crop size of 14.2 crore kg, actual production this season is estimated at nearly 23.6 crore kg, resulting in excess stocks and putting pressure on market prices.

The average price realised so far is Rs 209.83 per kg, compared with Rs 248.86 per kg recorded during the corresponding 132 auction days last year. Last year, 14.027 crore kg had arrived at the market during the same period.

However, recent auctions have brought some relief. Competition among buyers has increased, while the proportion of no-bid bales has fallen to around 12% on average each day. At some auction centres, no-bid bales have dropped to below 1% to 2%. About one crore kg of tobacco is currently entering the market every week, and rising buyer competition is gradually supporting better price realisation for farmers.

Regional price trends have also been encouraging. The Northern Light Soils (NLS) region recorded the highest price of Rs 329 per kg, while the maximum prices in Southern Light Soils (SLS) and Southern Black Soils (SBS) stood at Rs 255 and Rs 252 per kg, respectively.

Looking ahead, the government has reduced the authorised FCV tobacco crop size for 2026-27 from 14.2 crore kg to 8.1 crore kg to align production more closely with market demand and prevent another build-up of surplus stocks.

The Tobacco Board is conducting awareness programmes to encourage farmers to cultivate within the permitted limits. The government hopes that tighter production control, improved buyer participation and stronger demand will help create more stable prices and better returns for tobacco growers.