By Timothy S. Donahue
Top Takeaways:
- High rejection rates: Tobacco auctions in Andhra Pradesh continue to see elevated “no-bid” rejections, with more than 25% of bales rejected on Saturday.
- Grower frustration: Farmers report that low prices and repeated rejections are increasing financial pressure, despite government efforts to stabilize the market.
- Market uncertainty: Auction conditions remain uneven across the Southern Black Soils and Southern Light Soils regions, signaling continued volatility in India’s flue-cured tobacco sector.
India’s flue-cured tobacco auctions remain under pressure, as growers report persistent “no-bid” rejections and prices that are weaker than expected, despite a recent intervention by state officials aimed at stabilizing the market.
Farmers in Andhra Pradesh’s Southern Region said auction conditions have yet to improve as the 2026 marketing season progresses. At the Kanigiri auction platform, growers reported that only 12 of 25 bales offered for sale on Saturday were purchased, with successful bids ranging from ₹200 ($2.08) to ₹220 per kilogram. The remaining bales received no bids.
“We are facing serious financial troubles due to transport costs and low pricing even for quality stocks. Buyers are creating fear with ‘no-bid’ rejections,” said B.V. Srinivasa Rao, a tobacco farmer from Kanigiri told media.
Market weakness persists despite recent discussions led by Andhra Pradesh Chief Minister N. Chandrababu Naidu, cabinet ministers, and local officials to improve auction conditions across the state’s Southern Black Soils (SBS) and Southern Light Soils (SLS) tobacco-growing regions.
Auction data released by officials indicates that challenges have persisted. On July 17, 5,573 bales, or 18.4% of the tobacco offered for sale, were rejected, and the average auction price was ₹195.20 per kilogram.
Conditions worsened on July 18, when 7,612 bales were rejected—representing 25.4% of the tobacco offered—including 1,932 bales that received no bids from buyers.
Several auction platforms reported unusually high rejection rates:
- Kanigiri: 55.4%
- Vellampalli: 36.5%
- Ongole-2: 32.3%
- Kandukuru-2: 31.7%
- Kaligiri (Nellore): 31.1%
Other markets performed better, with rejection rates of 7.0% at Kandukuru-1, 9.4% at D.C. Palli, and 10.6% at Kondapi, highlighting uneven buying activity across the region.
