Leaf News

India: Wireless auctions

The Tobacco Board of India inaugurated India's first wireless tobacco auction on November 9 in a joint project with Bangalore-based Cranes Software International Limited. The new e-auction system is envisioned to replace the current manual auctions. Using wireless Handheld Terminals (HHT), the transactions are recorded and processed at a speed unimaginable using a manual system.

"The complete auction process happens on a handheld terminal in a wireless networking environment," said Asif Mohamed, of Cranes Software. "Besides buyers and auction officials, these handhelds can be used by classifiers - the board officials in charge of inspecting and evaluating the quality of tobacco bales."

The tobacco being presented for auction is first graded, and the results are made available on the HHT. In the auction room buyers are invited to bid for bales. Bids are input in the HHT. The maximum bid wins the bale. If no bid is made for a lot, the auction server automatically reduces the asking price by a pre-determined amount. If, afdter a specified time, there is no higher bid received, the system awards the sale to the highest bidder. All the processes, including price discovery, are displayed on a large LCD screen in real time.

"The system can accommodate five to six board officials and about 700 buyers, recording transaction volumes of 1,200-1500 100kg bales per platform each day," Mohamed said.

Farmers can reject an offered price, and this is recorded on the HHT by a board official. Once recorded, the farmer can remove the lot from the auction. A buyer can also reject a lot after inspecting the bale through coordination with a board official. The reasons for rejection are noted. If, for example, the bale is found to be underweight, the revised weight is entered into the HHT.

Malawi: 50% more farmers want tobacco

The number of small- and large-scale farmers who have applied to grow burley tobacco rose from 24,634 registered in 2007 to 37,078 farmers because eof improved prices, according to Malawi's Tobacco Control Commission. Tobacco brings in around 60% of Malawi's foreign exchange earnings.

Tobacco fetched 37% more in 2008 than in 2007, reaching an average of US$2.43 a kilogram on sales of 189 million kg, compared to 111 million kg in 2007.

India: Leaf exports may reach US$700 mln

Earnings from Indian tobacco exports may increase by around 40% this year, thanks to increases in prices paid. Export volumes are expected to remain at around those of 2007-2008 though, from which the country earned around US$503 million.

"We feel the value of tobacco exports may increase to US$700 million this year as prices in global markets have shot up significantly," said J Suresh Babu, chairman, Tobacco Board of India.

Prices of tobacco reached a record average of Rs84.85 (US$1.723) per kg during auctions in Andhra Pradesh this year against Rs47.47 last year, due to a global shortage of tobacco. The highest-quality Andhra Pradesh tobacco brought in a record high of Rs141 a kg this year, compared to Rs65 in 2007.

"Even the ongoing Karnataka auctions, which started in September and will continue till February, are fetching high returns as prices have shot up even higher than the Andhra auctions to an average of Rs104.80 per kg," Babu said.

The price of Karnataka flue-cured Virginia tobacco sold during the first month of auctions in 2008 averaged Rs102.69 (US$2.15) per kg, almost double the Rs 59.23 per kg earned last season, on sales of 19.10 million kg. Karnataka, which was awarded an authorized crop of 96.62 million kg, actually harvested around 101.29 million kg.

According to Babu, favorable global market conditions and continuing crop shortages in Zimbabwe, Europe and China were likely to see demand for Indian tobacco remain strong for the next 2-3 years, resulting in higher prices.

Tobacco exports increased by 25.30%, from 81,110 tons to over 100,000 tons, during the 2008-09 fiscal year to August, according to the Tobacco Board of India. Income from tobacco exports totaled exports also rose by 64%.

"The country's exports shot up by 25% in volumes and 64% in value terms due to lower inventory in some cigarette firms across the world and shortage of supply in Brazil and Zimbabwe," said a tobacco board official quoted by PTI. "Among tobacco leaf, export of flue-cured virginia (FCV) variety improved by 19% to 70,365 tons during the review period, he said.

Tobacco product exports also increased by 12.69% to 12,189 tons, according to figures released by the Tobacco Board.

Philippines: No aid for tobacco farmers?

If the country fails to implement graphic health warnings on cigarette labels, its tobacco farmers may be given least priority status for foreign aid for displaced tobacco farmers, according to a statement by the Framework Alliance on Tobacco Control-Philippines (FATC). Manila has yet to pass passing graphic health warning bills which, according to FATC, it was required to mplement by September 4 as an FCTC signatory.

"Framework Convention Alliance is crafting guidelines on giving aid to member countries," said Maricar B. Limpin FATC executive director. "One of the possible guidelines is to give least priority to noncompliant countries, which includes the Philippines,"

The Philippines joins Vietnam, Mongolia, Qatar and Myanmar in the list of noncompliant countries.