Indian tobacco consumption, exports may dip by 20% due to lockdown

Hyderabad, Apr 17 () Domestic consumption and exportof tobacco may witness a dip of about 20 per cent during thecurrent year due to the ongoing lockdown to containcoronavirus spread in India as well as some countries inEurope and the US, sources close to the Tobacco Board said.

Sources indicated that the Board may ask farmers to cutsowing in Karnataka this year following the plunge in demand.

However, the Board was yet to take a call on that.

A member of India Tobacco Association noted that thecountry exports about Rs 5,000 crore worth of tobacco aftervalue addition to USA, Europe and other countries.

"Like any other industry the tobacco industry also cameto standstill due to lockdown. Tobacco auction in AP whichbegan earlier was also suspended. It is expected to beginafter April 20.

Due to delay in supplies and also health advisories onCOVID-19, there may be muted demand this year.

Tobacco Board expects about 20 per cent dip in demandthis year," sources told .

When contacted, Tobacco Board chairmanRaghunadha BabuYadlapati said Andhra Pradesh and Karnataka produced 124million kgs and 103 million kgs respectively last year.

"We will ensure that all the tobacco produced by farmerswill be cleared. We will request the industry to lift unsoldstocks if any from them.

We will not let any farmer suffer even if there is a dropin demand," Babu said.

Without providing absolute numbers, he said therestrictions on smoking and the extended lockdown may impactthe tobacco consumption.

Of the total tobacco produced in the country, one thirdor about 65 per cent is exported.

The Board chairman said this year they granted permissionto sow 140 million kgs and 99 million kgs in AP and Karnatakarespectively.

The ITA member said the tobacco crop fetches about Rs3,500 crore at the farmers' level and after value additionabout Rs 5000 crore worth of the commodity is exported.

"The foreign buyers are yet to come to India andphysically inspect the product and place orders, thoughinitial discussions on requirement and quality parameters areover.

They changed their travel plans as there is completelockdown in most of the countries," the ITA member said.

According to the ITA, the auction for Andhra Pradesh'sstock is expected to resume from April 19 when the relaxationsannounced by the Centre will come into force for certainsectors.

The ITA member said as far as Karnataka crop wasconcerned, except one million kgs, rest of the commodity wasauctioned.

Every year a committee on production & production controlof Tobacco Board lays down policy and fixes crop size fordifferent soil regions in AP and Karnataka taking intoconsideration various factors such as demand for flue curedvirginia tobacco (FCV) in India and abroad and themarketability of different varieties. GDKROH ROH