Tobacco prices at auctions in Karnataka have seen a significant rise, driven by strong demand from international markets. The average price for flue-cured virginia (FCV) tobacco reached a record ₹257.46 per kg in the 2023-24 season, marking a 13% increase from the previous season's average of ₹228.01 per kg. This upward trend in prices, recovering from a six-year low in 2020-21, is attributed to the Tobacco Board's data, indicating a consistent rise over the past four years with the highest bid reaching ₹290 per kg in the latest season.
The total tobacco production in Karnataka for the 2023-24 season was estimated at 82.85 million kgs, with a fixed crop size of 100 million kgs. Despite this, the actual production by authorized growers was around 71.34 million kgs, with additional unauthorised production contributing to the total. Looking ahead, the Tobacco Board has maintained the crop size at 100 million kgs for the 2024-25 season, reflecting a stable production outlook amidst robust export demand, especially from India, which saw an 18.16% increase in tobacco exports during the April-February period of the current financial year.
The rise in tobacco prices has influenced growers in Karnataka, with many preparing for the next season's seedling production in anticipation of continued high prices, even before the onset of pre-monsoon rains. However, the competitive pricing of ginger, another major crop in the region, might divert some attention of the farmers. The global decrease in tobacco supply, particularly from African countries like Zimbabwe affected by El Niño, is likely to sustain high price levels, as indicated by the Federation of Karnataka Virginia Tobacco Growers Association.