2 weeks ago
Andhra Pradesh Tobacco Auctions Improve Despite Surplus Price Pressure
Tobacco farmers in Andhra Pradesh are selling their crop at auctions.
The state says the auctions are working better because more buyers are competing.
By September 4, about 86.59 million kilograms had been sold over 132 auction days.
Farmers produced about 236 million kilograms, even though the permitted amount was 142 million kilograms.
This extra tobacco created a surplus and pushed average prices lower than last year.
The average price so far is Rs 209.83 per kilogram.
Some tobacco still receives no bid, but these lots have become less common.
About 10 million kilograms is being sold each week, and some areas recorded bids as high as Rs 329 per kilogram.
Next season, the government will allow only 81 million kilograms to help match production with demand.
About 86.59 million kg of FCV tobacco was marketed by September 4 after 132 auction days.
Estimated production of 236 million kg exceeded the permitted 142 million kg, creating surplus pressure.
The average price was Rs 209.83 per kg, below last year’s comparable Rs 248.86 per kg.
Buyer competition has improved, while daily no-bid lots average 11–12% and fall below 1–2% at some platforms.
The permitted FCV crop quantity for 2026–27 will be reduced from 142 million kg to 81 million kg.
- Who
- Andhra Pradesh Agriculture Minister K Atchannaidu, the state government, the Tobacco Board, tobacco farmers, buyers, manufacturers, exporters and traders.
- What
- Market conditions in the 2025–26 Flue-Cured Virginia tobacco auctions are improving, although surplus production continues to pressure prices.
- Where
- Andhra Pradesh, including the Northern Light Soils, Southern Light Soils and Southern Black Soils auction regions.
- When
- The figures were reported as of September 4 during the 2025–26 auction season; the reduced crop limit applies to 2026–27.
- Why
- Production exceeded the permitted quantity, creating surplus, while the government aims to align future cultivation with market demand and support better prices for farmers.
Improving-market view
Surplus-and-price-pressure view
Auction performance
Improving-market view
The government says buyer participation and competition have improved, no-bid lots have declined, and competitive bidding is supporting better price realization.
Surplus-and-price-pressure view
Average prices remain below last year’s comparable level, and daily no-bid lots still average about 11–12%, despite lower rates at some platforms.
Production policy
Improving-market view
Reducing the permitted crop quantity to 81 million kg next season is intended to match production with demand and prevent future surplus.
Surplus-and-price-pressure view
This season’s estimated production of 236 million kg exceeded the permitted 142 million kg, showing the scale of the current oversupply and its effect on prices.
Key facts
- Tobacco marketed
- About 86.59 million kg by September 4
- Auction period
- 132 auction days
- Estimated production
- About 236 million kg
- Permitted quantity, 2025–26
- 142 million kg
- Average price
- Rs 209.83 per kg, compared with Rs 248.86 per kg during the comparable period last year
- Weekly marketing volume
- About 10 million kg
- Highest regional bids
- Rs 329 per kg in Northern Light Soils, Rs 255 in Southern Light Soils and Rs 252 in Southern Black Soils
- Permitted quantity, 2026–27
- Reduced to 81 million kg
Quotes
K Atchannaidu
Andhra Pradesh Agriculture Minister
“Market conditions in the ongoing 2025-26 Flue-Cured Virginia (FCV) tobacco auctions have shown a steady improvement, marked by a decline in ‘no-bids’ and increased competition among buyers.”
theprint.in
Sources
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