So what’s going on with MYSORE FCV crop 2022?
The auctions, which began on Monday the 10th Oct at all the 10 platforms, have raised hopes among the growers of a better season ahead with an opening price of Rs. 202/kg (US $2.46/kg) for green tobacco.
All the excitement did not last long as the prices quickly escalated to a whopping Rs. 260/kg (US $3.17/kg) on the 8th day of auctions which lead all the companies take a collective and proactive decision to not bid over Rs. 230/kg (US $2.80/kg).
On the 9th day of auctions, this decision was immediately opposed by the growers with commotion and display of protests that resulted in complete halt of auctions at all the floors.
Here are the stats for some perspective:
18.10.2022 vs 18.10.2021:
· High Bid: Rs.260/kg (US $3.17/kg) vs Rs.186/kg (US $ 2.27/kg)
· Avg. Price: Rs.233/kg (US $2.85/kg) vs Rs.150/kg (US $1.84/kg)
· Low Bid: Rs.150/kg (US $1.83/kg) vs Rs.100/kg (US $1.22/kg)
· Estimated Crop Size: 63.69 Mil Kgs vs 81.71 Mil Kgs
· Targeted Crop Size: 100 Mil Kgs vs 97 Mil Kgs
· Crop Sold: 2.1 Mil Kgs vs 3.8 Mil Kgs
The apparent reasons one would assume for such high prices would be the continuing geopolitical concerns, rising interest rates, inflation, high prices of crude oil etc.
But in contrast and despite the turmoil in the global economy, Indian financial situation continues to remain resilient. All the reasons above do contribute a little but the fair share of the blame is on,
1. The reduced crop size which is a direct result of the adverse climate conditions that brought down the crop to 63.69 million kgs from the targeted 100 million kgs.
2. Overall reduction in tobacco crop size globally.
In a situation like this, the growers obviously would try to embrace the opportunity but this time around it’s different.
As opposed to 12 active companies at the auction floors in 2021, crop 2022 witnessed 24 active companies.
Hoping the tobacco would get even expensive, a third of these companies opted to disruptive and speculative buying strategy wherein they intend to procure as much volume as possible by bidding higher and higher.
This creates a very unpleasant market situation which the Tobacco Board of India along with the Trade and Framers Associations are trying to resolve at the moment.
#tobacco #tobaccoindustry #kkme #kkmetobacco #economy #agriculture #farmers #indiantobacco #mysore #mysorefcv
