In a remarkable economic narrative, the average price of tobacco grown in Karnataka has seen a meteoric rise over the past nine years. The Flue Cured Virginia (FCV) tobacco, primarily cultivated in the Mysuru and parts of Hassan district, has more than doubled in price, reflecting a significant shift in the agricultural landscape of the region.
The journey of Karnataka’s tobacco pricing is a story of resilience and market dynamics. From an average of ₹107.49 per kg in the 2014-15 crop season, the prices have climbed steadily, reaching ₹257.46 per kg in the 2023-24 season. This price hike is attributed to buoyant market conditions and the quality of the FCV tobacco, which is predominantly exported.
Despite a fixed crop size of 100 million kg for the year 2023-24, only 88.86 million kg was marketed, indicating a demand that outstrips supply. The highest bid during the auction season went up to ₹290 per kg, showcasing the premium quality of the bright grade tobacco, which averaged at ₹269.3 per kg.
Market Forces and Trends
The fluctuation in tobacco prices over the years has been influenced by various factors, including global demand, climatic conditions, and the push from anti-tobacco activists urging a shift to alternative crops due to health concerns. However, the robust prices in recent years reflect a strong market presence and the strategic positioning of Karnataka’s tobacco in the global market.
The Tobacco Board’s strategic management and the farmers’ adaptability to market needs have played crucial roles in this price evolution. The region’s commitment to maintaining high-quality standards has ensured that Karnataka’s tobacco remains a sought-after commodity on the international stage.
Looking to the Future
As the tobacco industry in Karnataka navigates through the complexities of health advocacy and market demands, the significant rise in prices over the last nine years stands as a testament to the region’s agricultural prowess. The future holds a balance between sustainable practices and economic growth, with tobacco continuing to be a key player in Karnataka’s agrarian economy.
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