ITC raised cigarette prices again in September 2026

ITC increased prices across several cigarette brands in September 2026, taking Classic Connect to Rs 428 and Gold Flake Super Star to Rs 89. It was the second such increase reported during 2026, and shares in both ITC and Godfrey Phillips rose on the news.

For a leaf and cut rag supplier the interesting part is not the retail price. It is what a manufacturer's willingness to raise it says about the demand sitting underneath.

Pricing power points to volume holding

A manufacturer raises prices when it expects volume to survive the increase. In a market under genuine pressure from illicit product, the calculation is finely balanced, because every rupee of legal price increase widens the gap that smuggled stock exploits. Going ahead anyway suggests reasonable confidence in the legal segment.

That matters to anyone supplying into Indian cigarette manufacture. Cut rag and ready blend demand tracks stick volumes, not retail prices, but stable volumes with improving realisation is a healthier backdrop for a supplier than volumes defended by discounting.

The contrast with leaf

It is worth holding these two facts side by side. Indian FCV auction realisations fell this season, with the Andhra Pradesh average at Rs 213.27 per kg against Rs 248.86 the previous year. Over the same period the manufacturer at the other end of the chain was able to raise prices.

That is the ordinary shape of an oversupplied raw material market. Value accrues where the scarcity is, and this year the scarcity was not in leaf. For growers it has been a hard season. For manufacturers buying leaf, and for processors buying byproduct, input costs have been favourable.

Whether that persists depends in part on the Tobacco Board's decision to cut the authorised 2026-27 Andhra FCV crop to 81 million kg from 142 million kg, which we wrote about separately.

If you buy cut rag

We cut and condition to a benchmark sample you supply, and blend to a matched sample where the requirement is a finished blend. Both are released against a batch report. Send the specification and the sample, and we will quote against current stock.

Sources: ITC price increase reporting, September 2026. Tobacco Board auction figures as reported 24 September 2026.