Tobacco price crash: Crop size reduced to 90 million kg for Karnataka during 2026-27

Karnataka's tobacco crop size reduced to 90 million kg for 2026-27 due to falling prices and subdued demand.

The Tobacco Board has reduced the crop size for Karnataka from 100 million kg during 2025-26 to 90 million kg for 2026-27. The reduction in crop size comes in the wake of the drop in prices of tobacco.

Tobacco Board chairman Yashwanth Kumar, who participated in the board’s meeting held in Mysuru on Monday, said the crop size had been reduced not only in view of subdued demand, but also to ensure that the current crop is marketed at a remunerative price.

Even though the crop size for 2025-26 was fixed at 100 million kg, the production is estimated to be only 87.97 million kg.

Tobacco farmers in Karnataka had resorted to an agitation after the prices of bright grade varieties fell from a peak of ₹320 to ₹270–280 last month. 

The traders, who scaled down procurement, blamed the reduced demand for cigarettes on its higher price after the Union Budget levied Excise duty and increased the GST on tobacco products from 28 to 40%.

During the meeting, Indian Tobacco Association (ITA) secretary Y.A. Chowdary said production had gone up in countries like Brazil and Zimbabwe, which is also impacting prices.