Preliminary assessments indicate that the 1997 tobacco crops will be higher in several of the worlds major producing countries. Larger crops are forecast in Argentina, Brazil, Mexico, and Zimbabwe, with marginally smaller output anticipated in China. China is by far the worlds leading leaf producer, accounting for nearly 40 percent of the worlds leaf tobacco crop in 1996. Total world unmanufactured tobacco output in 1996 reached 6.33 million tons (dry-weight), up 10 percent from 1995.
Argentina's leaf output is forecast to reach 97,000 tons in 1997, an increase of nearly 26 percent from 1996. Production of flue-cured tobacco, the leading type grown in Argentina, is expected to jump 24 percent to 62,000 tons, while burley output should increase 36 percent to 26,500 tons. Total leaf plantings are expected to increase nearly 15 percent in 1997 due to strong grower returns last year and an expected strengthening in the foreign demand for Argentine leaf in 1997 due to favorable prices. Argentina is expected to export 60,000 tons of unmanufactured tobacco in 1997, up about 25 percent from the 48,000 tons exported in 1996. Flue-cured tobacco is the leading tobacco type exported by Argentina. For 1997, flue-cured exports are likely to reach 40,000 tons, up 25 percent over 1996. Burley exports are expected to reach 15,000 tons this year, an increase of 36 percent over 1996. Argentina's leading export markets for leaf tobacco in 1995 were the United Kingdom (18,771 tons); the United States (14,345 tons), Germany (10,461 tons); Belgium (10,037 tons); and France (10,001 tons). Argentina is not a significant leaf importer. For 1997, imports are expected to total 3,000 tons, down nearly 52 percent from last year due to increased production levels in 1997.
Brazil's production of total unmanufactured tobacco is expected to reach 429,500 tons in 1997, up about 17 percent from 1996. Much of the rise in output stems from increased plantings due to industry expectations that foreign demand for Brazilian leaf will be higher in 1997 and that cigarette production for export will also increase. Yields are also forecast to rise in 1997 as favorable weather conditions which have prevailed early in the growing season are expected to continue. Flue-cured tobacco is the leading tobacco type grown in Brazil. Flue-cured output in 1997 is expected to increase by over 44,000 tons from last year, reaching 317,000 tons. Burley output is forecast to increase by over 14,000 tons, reaching 74,000 tons. Brazil's total leaf exports in 1997 are expected to reach nearly 273,000 tons, up almost 9 percent from 1996. Brazil's export prices for the 1997 season are expected to be attractive to foreign buyers. The European Union and the United States are by far Brazil's leading leaf export markets. Other export markets for Brazilian leaf include Japan, the Philippines, and South American markets. In 1997, Brazil is expected to import about 7,000 tons of leaf tobacco, much of which is dark air-cured and dark sun-cured tobaccos. Suppliers of Brazil's leaf imports include the European Union, Argentina, and Zimbabwe.
China: China's 1997 tobacco production is forecast at 2.29 million tons, up 2 percent from 2.25 million tons produced in 1996. Most of China's tobacco production is flue-cured. The tobacco monopoly's policy of discouraging the production of lower quality tobacco is still in effect. Procurement prices and incentives are used to influence the market and move tobacco production to the desired location. This includes an effort to locate tobacco production away from the fertile Yellow River Valley provinces.
In 1996, official Chinese reports suggested that the anti-smoking campaign had lowered actual smoking. News reports from the southern city of Guangzhou indicate that consumption has dropped drastically (almost 40 percent) and that there is an increase in anti-smoking sentiment. However, reports from other cities, such as Beijing and Shanghai, do not indicate declines in consumption or increases in anti-smoking sentiment. In Beijing, 60 percent of males between the ages of 20 and 40 years of age smoke.
Cigarette production is projected to increase slightly, approximately 2 percent, in 1997. Tobacco use for cigarette production is also projected to climb 2 percent from 2.22 million tons in 1996 to 2.26 in 1997. Most of China's cigarette production will be consumed domestically.
Tobacco stocks are down from previous years and are expected to continue their decline. Ending stocks are estimated at 1.38 million tons in 1996 and are expected to decline to 1.36 million tons in 1997. Exports are expected to be up slightly from 58,000 tons in 1996 to 60,000 tons in 1997, just over a 3 percent increase. Imports are expected to be down over 28 percent, from 21,000 tons in 1996 to 15,000 tons in 1997.
Total unmanufactured tobacco output in 1997 is expected to reach about 44,000 tons, relatively unchanged from 1996, and about 8 percent higher than in 1995. The Mexican tobacco industry is expected to rebound slightly as Mexico's economy shows signs of improving. The domestic cigarette market is likely to show moderate growth in the short-term which is expected to push the demand for leaf by domestic cigarette manufacturers higher in 1997. Production of burley tobacco, the leading type grown in Mexico, is expected to total 24,800 tons in 1997, up 6 percent from last year. Flue-cured production is projected to reach 6,900 tons, down about 4 percent than in 1996. Mexico's leaf exports, which are nearly all burley type tobaccos, are forecast to remain at 13,000 tons in 1997, about the same level as in 1996. Mexico's leaf exports improved in 1996 as the late 1994 devaluation of the Mexican peso kept Mexican leaf competitive on the international market. The United States is Mexico's leading export market for burley tobacco. Mexico's leaf imports are projected to total about 3,000 tons in 1997, unchanged from 1996. The relatively low level of imports can be attributed to ample domestic supplies of sufficient quality tobaccos for domestic use.
In 1997 flue-cured tobacco production is expected to continue its increase. Flue-cured production has increased steadily since 1994. Production in 1997 is forecast at 203,237 tons, up almost 17 percent from 1996 production of 173,938 tons. In general, in the 1995/96 season, the summer rainfall was abundant and widespread and led to plenty of water for irrigation throughout the growing season, leading to a high quality product. The quality of the crop and tight world supplies, resulted in strong prices during 1996 and are expected to provide a strong incentive to increase planted area this year.
Total tobacco production is forecast to rebounded after a decline in 1996. Production in 1997 is forecast to increase more than 17 percent from 178,595 in 1996 to 209,272 in 1997. The previous year's decline in total production is attributable to production problems with burley tobacco. Production of burley dropped almost 40 percent in 1996 to 4,632 tons. The drop in production is due, at least in part, to poor prices, the lack of a local auction, and difficulty getting seed in time for planting. The new auction in northern Zimbabwe is finished, opened at the end of the marketing year, and should be open for the next marketing year providing better marketing opportunities for farmers. Additionally, a "seedbed scheme" developed to encourage planting of burley will be expanded for the 1997 marketing year. Thus, burley production for 1997 is forecast to increase almost 30 percent to 6,000 tons.
The information presented in this section is based on Foreign Agricultural Service reports received from the subject countries during late 1996. This information provides an indication of production, trade, and consumption trends for 1997. All production data presented is measured on a dry-weight basis unless otherwise indicated.