India Exploring China As New Market For Tobacco Exports.

The Tobacco Board, which oversees cultivation, trade and marketing of tobacco in the country, is now exploring options of tobacco exports to China.

A team led by chairman G Kamalavardhan Rao and others had recently visited China to study the market conditions and also to interact with State Trade Monopoly Administration (STMA), the policymaking body of tobacco industry in China.

China now imports about 100 million kg tobacco from countries other than India, which produces about 165 to 170 million kg tobacco.

“Indian tobacco can match the tobacco from other countries in terms of quality and is available at competitive prices,” said Rao, adding that Indian exporters are adhering to quality requirements of international standards.

The board, which is supposed to ensure that tobacco growers get fair and remunerative price for their produce, had asked Chinese tobacco industry to visit Andhra Pradesh and Karnataka to assess the quality of Indian tobacco.

“Chinese officials have shown keen interest on strengthening trade relations between China and Indian tobacco industries. They would be visiting India soon,” Rao said, adding they have asked for samples.

“We are expecting export of 10 million kg in the next season. The trade potential could be over Rs 100 crore. We are expecting an order shortly," Rao said.

China now imports tobacco at an average price of around $7 a kg, mostly from Zimbabwe. Indian tobacco will be priced around $5 to $5.5 a kg. In terms of quality, tobacco from Zimbabwe is better than Indian tobacco.

Major export destinations for Indian tobacco are Belgium, Egypt, Russia, the Netherlands, Germany, Yemen and Philippines. The export season for this year has nearly ended and the new cropping season begins now.

The Board fixed the tobacco size for Andhra Pradesh region, which includes Orissa and Maharashtra, for 2011-12 at 162 million kg, about five per cent less compared with 170 million kg allowed during 2010-11. A better than expected crop in Brazil and other countries has put Indian tobacco farmers at a disadvantage as the demand for tobacco from traders reduced.

For quarter ended June, total tobacco exports were valued at Rs 1,037.75 crore, about seven per cent more than Rs 970.48 crore during the same time last year. In dollar terms, the export has been valued at $231.95 million, nine per cent more than $212.5 million.

The June quarter had seen 64,392 tonne tobacco including unmanufactured tobacco and tobacco products have been exported registering a nine per cent increase from 59,263 tonnes in the corresponding period last year.

Source : mydigitalfc.com