Unmanufactured Tobacco Production in Selected Countries
World unmanufactured tobacco production for 1997 is forecast at 7.51 million tons, up 5 percent from the revised 1996 crop of 7.18 million. Except for China, production is up in all the major trading countries in response to higher world prices. From 1995 to 1996 production rose 13 percent, largely due to the sharp rise in Chinese production. For 1997, Chinese production is forecast to remain unchanged from last year.
United States: Tobacco production for 1997 is forecast at 782,000 tons, up 14 percent from 1996 due to increased plantings and higher expected yields. Flue-cured production is forecast at 450,000 tons, up 9 percent from last year, while burley is forecast at 294,000 tons, up 24 percent.
European Union (EU): Tobacco production in the EU for 1997 is forecast at 353,326 tons, down slightly from 1996. The level of tobacco production in the EU is tightly regulated and varies only because of changes in weather. Greece and Italy, the two largest tobacco producers, are forecast to produce 132,000 and 136,000 tons respectively in 1997, little changed from last year. EU tobacco production is based upon type quotas that are issued for each country. For example: in Italy the flue-cured quota is 48,000 tons. The EU quota payment or premium paid directly to the farmer is US$3.13 per kilo. The market price for 1996 flue-cured crop was only US$0.72 per kilo or only 19 percent of total producer return.
China: Tobacco production for 1997 is forecast at 2.90 million tons, unchanged from the revised estimate for the 1996 crop which was up 25 percent from 1995. The increase in production over 1995 was due largely to higher yields. Leaf quality in 1996 also was higher, as measured by an increase in the percentage of tobacco in the highest grade and the percentage of tobacco that was up to procurement standards. Currently, weather conditions are favorable for the 1997 crop, and it is believed that the State Tobacco Monopoly Administration (STMA) will not have a problem with a crop as large as 1996. Flue-cured tobacco accounts for about 95 percent of total production, or 2.76 million tons. Production is estimated at only 75,000 tons and 35,000 tons for burley and oriental, respectively. There is little domestic demand for these types as most cigarettes are made from flue-cured tobacco. The STMA has tried to limit tobacco production by keeping procurement prices low. However, provincial governments collect taxes from tobacco and do not actively support national policy to reduce production.
India: Tobacco production for 1997 is forecast at 604,500 tons, up 7 percent from the 1996 crop estimate of 562,750 tons that was revised upward from the original projection because of higher-than-expected yield. For 1997, production is forecast to increase because of increased plantings. This is the result of increased export demand and higher domestic prices. Flue-cured tobacco production for 1997 is estimated at 170,000 tons, up 33 percent from the revised 1996 crop. The increase is due largely to a 25-percent increase in plantings because of a strong export market and higher price supports, as well as lower prices for competitive crops such as chilies and pulses. Burley production is estimated at 8,500 tons, up 125 percent from last year and light air-cured is estimated at 15,000 tons, up 121 percent. Both types are estimated up because of increased plantings and higher yields. Dark air and sun-cured production for 1997 is estimated at 410,500 tons, down 3 percent from revised 1996 output due to reduced plantings. The production of this type is dependent on the free market and has no price support.
Brazil: Tobacco production for 1997 is estimated at 545,000 tons, up 21 percent from 1996 due to higher yields and increased plantings. The 1997 crop also is considered to have the best quality in 10 years. While the price paid for the 1997 crop was unchanged from last year in Reals, it was down about 7 percent in US dollars. However, labor costs are down from last year. This, and the devaluation of the Real, reduced tobacco production costs in the Southern Region 10 percent from last year. Flue-cured production for 1997 is estimated at 386,000 tons, up 22 percent from last year. Burley production increased 29 percent to 90,000 tons, and light air-cured production is up 500 tons, to 4,500 tons. In the Northern Region, production of cigar and dark air and sun-cured production remained unchanged at 6,000 and 54,000 tons respectively.
Argentina: The 1997 tobacco crop is estimated at 122,700 tons, up 25 percent from 1996 due to favorable farm prices, increased plantings, and higher yields due to good weather. An important part of the total payment received by the tobacco producer is provided by the Special Tobacco Fund payment (STF) collected from retail taxes on cigarettes. Last year, the STF was US$1.20 per kilo, while the farm price was about US$1.82 for flue-cured and about US$1.20 per kilo for burley. This year, burley and flue-cured prices are US$2.04 and US$1.35 per kilo, respectively, while the STF is only US$0.70 per kilo because of the larger crop. The lost support is expected to be compensated for from other sources. Flue-cured production is up 28 percent, to 75,500 tons for 1997, with much of this production supported by tobacco buyers through loans and technical support. Burley production is up 35 percent, to 36,200 tons. In Misiones, where 72 percent of the burley is grown and 70 percent of the crop is exported, tobacco quality was better than last year.
Indonesia: Favorable prices and good weather to date are expected to produce a 1997 crop of 184,300 tons , up 4 percent from 1996. Plantings have remained high because of the good prices paid for the high quality 1996 crop. Dark air and sun-cured production is forecast at 117,500 tons, up 5 percent from last year. Most of this tobacco is grown by small farmers on unirrigated land and is used to make clove cigarettes for export. Flue-cured production is forecast up percent, to 45,700 tons, as tobacco prices are more favorable than prices for competing crops. Cigar tobacco production is forecast up 4 percent due largely to higher yields.
Turkey: Total tobacco production for 1997 is forecast at 235,400 tons, up almost 3 percent from 1996. Oriental tobacco, the major type grown, is forecast at 229,400 tons, up 2 percent from 1996. Oriental tobacco prices are supported in part by burning low quality stocks. In the last few years, stable production levels and expanding exports have reduced the need to dispose of stocks. In 1994, a total of 70,000 tons were burned. In 1995,16,700 tons were burned, but falling tobacco stocks reduced burning to only 2,500 tons in 1996 and no burning will occur this year. The Government has reduced market controls and the export market for oriental tobacco has expanded. Also, the Government has proposed the ending of current production limits on oriental tobacco, but local observers think controls should be lifted gradually. Tobacco exports have been encouraged by more competitive pricing and limited world supplies.
Malawi: Tobacco production for 1997 is estimated at a record 152,700 tons, up 7 percent from the 142,162-ton crop of 1996. Improved economic conditions and free market outlets, which were opened to small farmers last year, have encouraged production expansion. Most tobacco production is from small 2 hectare plots. Burley is the major type produced with 1997 production estimated at 127,000 tons, up 8 percent from last year. The expansion is attributed to increased plantings. Yields would have been higher this year but higher-than-normal rains levels caused a slight drop in yields. Crop quality for 1997 is very good compared to the gray and moldy 1996 crop. Prices are down 4 percent in US dollars because of the larger crop. There are no price supports in Malawi but tobacco buyers provide loans to producers to plant the crop.
Zimbabwe: Tobacco production for 1997 is forecast at 210,580 tons, up 1 percent from last year, but down from the earlier projections due to above-normal rain fall between December 1996 and February 1997. Tobacco quality for 1997 is said to be above average. Flue-cured production for 1997 is estimated at 204,000 tons, down slightly from last year. Burley production is estimated up 5 percent to 6,500 tons. Tobacco prices for 1996 flue-cured tobacco were up 37 percent to US$2.94 per kilo, while burley was up 76 percent to US$1.92. Growers think this year's prices will be as good as last year's.
Prepared By: Arthur Hausamann, Production Estimates and Crop Assessment Division, USDA, (202) 720-0885.