Tobacco Exports Hit $1 Billion Mark, Thanks To Strong Dollar, Global Demand Help

Indian tobacco exports have crossed the $1-billion (Rs 6,000-crore) mark during the year ended March 2014, largely due to a strong dollar and global demand for certain varieties . During the year , India reported exports of Rs 6,059 crore ($1.001 billion), a 22% growth over the previous year's Rs 4,979 crore ($914.43 million).

The record for the highest exports so far in value terms was in 2009-10 at $928 million . India , the third-largest producer and the second-largest exporter of tobacco , saw significant growth in exports of Flue-cured Virginia (FCV) tobacco at 1.8 lakh tonne (Rs 4,085 crore), up from 1.73 lakh tonne a year ago . However , the country saw only a marginal growth in the overall volume of exports , including unmanufactured tobacco and tobacco products such as cigarettes , at 2.64 lakh tonne , up from 2.63 lakh tonne the previous year .

The dollar appreciated 11% against the domestic currency during the period under review . Andhra Pradesh and Karnataka are the two major producers of tobacco in the country , together accounting for more than half of India's tobacco production . The Tobacco Board is optimistic about tobacco exports from the country during the current fiscal as well, said its chairman K Gopal . "Despite several challenges across the world , we could achieve the $1-billion mark in exports . While the dollar appreciation helped exports grow significantly in value terms , the uptick in global demand also played a key role ," he told ET.

Gopal said the tobacco board has set a target of Rs 7,000 crore of exports during the current fiscal , a growth of over 15% in value and a marginal growth in volume , he said . Bellam Kotaiah , founder chairman of one of the largest exporters BVL Group and former president of Indian Tobacco Association , said , "Smaller global players are also getting access to Indian tobacco since the Indian tobacco was cheaper compared to Brazil and Zimbabwe ."

Kotaiah further said that while the average global tobacco price stood at $4 per kg , Indian tobacco was available at around $2.7 a kg . The key markets that helped the exports growth last year were western and eastern Europe , which together account for about half of unmanufactured tobacco.

Source:- economictimes.indiatimes.com