WORLD DEVELOPMENTS

Highlights:

A day after Canada's new tobacco law (Bill C-71) was ratified by the Canadian Parliament, the Government has acknowledged that the bill is flawed and promises to amend it by the end of the year. As ratified, Bill C-71 prohibits most advertising and restricts the ability of tobacco companies to promote themselves at sporting and cultural events. However, organizers of these events indicated that they would be forced to cancel many events if the bill was not changed. Although the Government had indicated that the sponsorship of sporting and cultural events by tobacco companies was bad public policy, the Government suddenly reversed its position and has told event organizers that it would allow tobacco company logos on international cars and uniforms. As expected, anti-tobacco forces are claiming that the Government caved into pressures exerted by the bill's opponents.

The Brazilian Ministry of Agriculture has issued phytosanitary regulations on the importation of Nicotiana tabacum, leaf tobacco. According to the Brazilian government, the primary objective of the regulation is to maintain plant health. The proposed date of adoption is June 30, 1997. The English translation of these regulations will be available through the Foreign Agricultural Service Office of Food Safety and Technical Services. For further information contact Carolyn Fillmore Wilson at (202) 720-2239.

Mexico's burley output is expected to reach 23,852 metric tons (farm-sales-weight) in 1997. This represents a decline of nearly13 percent from previous forecasts and is nearly 9 percent lower than 1996. Although area planted to burley is expected to increase nearly 20 percent due to a greater export demand, lower yields brought on by unfavorable weather conditions and an increased incidence of blue-mold in the state of Nayarit, the leading tobacco producing state in Mexico, are likely to push leaf quality and output lower. Mexico's burley exports in 1997 are forecast to reach 15,058 tons, up nearly 16 percent from 1996. The United States is by far Mexico's leading market for unmanufactured tobacco exports accounting for over 95 percent of this trade in 1996.

Effective April 1, 1997, South Korea's Ministry of Finance and Economy will increase the per pack taxes on cigarettes. The charge of two Won per pack will be levied equally on domestic and imported cigarettes. Revenue from the tax will go towards the Public Health Promotion Fund administered by the Ministry of Health and Welfare. Previously, public health promotion activities had been financed by a public fund which was abolished in July, 1996.

Zimbabwe's tobacco production estimate for 1997 has been lowered from initial forecasts. Zimbabwe’s 1997 flue-cured tobacco crop was forecast at 235,000 tons last December, but is now expected to reach about 205,000 to 210,000 tons. The lower forecast is attributed to heavier than normal rains. In 1996, Zimbabwe's flue-cured production reached 202,000 tons, with tobacco quality being very good for the top third of the crop. For 1997, tobacco quality and price may be down slightly from 1996.

Auction Reports:

Through the final sale day of the 1996/97 Canadian flue-cured tobacco marketing season (100 sale days), the Ontario Flue-Cured Tobacco Growers Marketing Board reports that 64,520 metric tons of flue-cured tobacco were sold this year. This represents a 7 percent decrease in sales when compared to the 1995/96 marketing season (127 sale days). Prices in Canadian currency this year averaged $4.12 (US$2.96) per kilogram, up more than 13 percent from last year. This year, sales of "A" graded leaves accounted for 79 percent of purchases, up from 74 percent last year.

Canadian Flue-Cured Auction Update
Final Sales
April 1, 1997

Source: Ontario Flue-Cured Tobacco Growers Marketing Board.

* Exchange Rates:

1995/96 U.S.$ = CA$ 1.37
1996/97 U.S.$ = CA$ 1.39

Last modified: Wednesday, November 26, 2003