Private traders: Tobacco procurement price of STC
As
STCs tobacco procurement price has failed to enthuse private traders into
participating in Andhras auction platforms, and the Union government may
introducing a price band in consultation with tobacco companies.
STCs
current procurement price would function as the upper limit, as no buyer is willing to pay
more, while the minimum prices, would be fixed only after receiving suggestions from local
traders, as reported.
The
prices at which STC is currently procuring tobacco in all five regions have proved to be
too high for most local traders, leaving only some 30-odd bigger companies in the market.
Industry
sources reported as lowest level in the price band is unlikely to be higher than the
minimum guaranteed price (MGP) of Rs.30-32/kg announced by the trade for this year, global
surplus of tobacco, which leads to a general sliding of prices.
The
prices of tobacco from Zimbabwe and Brazil are down as well. So unlike previous years, it would be impossible
for Indian traders to pay more than MGP. For instance, Egyptian tobacco is available in
the world market for $1.5/kg., which translates into Rs.29/kg for the higher grades.
In such a
situation, no Indian trader would be willing to buy at the current STC procurement prices
of Rs.41.60/kg in Guntur and Rs.63/kg in the northern light soil region,. |