Price crash: Anxiety over slow liquidation of tobacco on auction platforms

Tobacco farmers face anxiety as over 24 million kg remains unsold amid price crashes and poor demand on auction platforms.

Tobacco farmers across the region are gripped by anxiety over the slow liquidation of their produce, triggered by a sharp slump in prices and poor demand on auction platforms across the State.

Although the auction season commences in September–October and concludes by March every year, over 24 million kg of tobacco remains unsold on auction platforms in April this year. This is despite a relatively lower output of 85 million kg against the estimated crop size of 100 million kg for the 2025–26 season.

The poor offtake on auction platforms has further added to the woes of farmers, who were already reeling under the impact of the steep fall in prices. Bright-grade tobacco, which fetched as high as ₹320 per kg at the start of the season in October 2025, saw prices dip below ₹250 per kg by February. The decline followed a reduction in procurement by traders after the imposition of excise duty and an increase in Goods and Services Tax (GST) on tobacco products.

While prices of bright-grade tobacco have shown marginal stabilisation, rates for medium- and low-grade varieties have slid further below ₹200 per kg, triggering widespread resentment among the farmers.

“Alongside domestic taxation pressures, global supply has increased owing to a good harvest in key tobacco-producing countries such as Zimbabwe and South Africa,” said Vikram Raj Urs, general secretary of the Federation of VFC Tobacco Growers Association of Karnataka.

In protest against the price crash, agitated farmers have been forcing the closure of auction platforms in several parts of the Mysuru region every now and then.