United States Department of Agriculture Foreign Agricultural Service Circular Series FT-3-97 March 1997	Tobacco: World Markets and Trade

TOBACCO: WORLD MARKETS AND TRADE

MARCH 1995

This report draws on information from USDA's global network of agricultural attaches and counselors, official statistics of foreign governments, other foreign source materials, and results of office analysis. Estimates of U.S. acreage, yield and production are from the USDA Agricultural Statistics Board, except where noted. This report is based on unrounded data; numbers may not add to totals because of rounding.

The report was prepared by the Tobacco, Cotton and Seeds Division, FAS, AGBOX 1051, 14th and Independence Ave., Washington, DC 20250-1000. Further information may be obtained by writing to the division, or by calling (202) 720-9516, or by FAX (202) 690-1171. The next issue of the tobacco circular will be available electronically after 3:30 pm local time on April 27, 1995

WORLD DEVELOPMENTS

Highlights:

Hong Kong's Financial Secretary recently announced that beginning March 12, 1997 the import tax on cigarettes and cigars would be increased by 6 percent. Government sources indicated that the rate change was being imposed in order to keep import taxes in line with inflation. The new import tax on cigarettes will be HK$723 (US$93.50) per thousand cigarettes, up from HK$682 (US$88.20), while the new tax on cigars will be HK$930 (US$120.3) per kilo, up from HK$877 (US$113.40). The local tobacco trade believes this change will lead to increased smuggling activity which in the long-run will negatively affect cigarette tax revenues.

In Taiwan, the Executive and Legislative Yuan (Parliament) has approved the draft "Tobacco and Alcohol Management Law" which will replace the "Provisional Statute for Monopoly Tobacco and Alcohol in Taiwan Province." The law provides for private manufacturing and repackaging of tobacco products, though it leaves open the time-line of the liberalizations. These time-lines are also being discussed in the context of Taiwan's WTO accession. Additional requirements of the draft law include registration and licensing for manufacturers, importers and wholesalers, including unspecified fees. Tar and nicotine content will be limited to maximum levels and production must conform to health and safety standards. Upon prior approval joint processing and certain repackaging arrangements would be permitted, but this information must be included on the label. Additional labeling requirements include a conspicuous health warning on the largest side of the tobacco container. Under the draft law advertising is severely limited including bans against all broadcast and print media. Additionally, promotions through discounts, gifts, joint marketings and sponsorships are banned.

Auction Reports:

Through the 94^th sale day of the 1996/97 Canadian flue-cured tobacco marketing season, the Ontario Flue-Cured Tobacco Growers Marketing Board reports that 60,998 metric tons of flue-cured tobacco have been sold so far this year. This represents a 9 percent increase in sales when compared to the same period of last year's marketing season. Prices in Canadian currency so far this year are averaging $4.11 (US$3.00) per kilogram, up nearly 12 percent from last year. So far this year, sales of "A" graded leaves account for 79 percent of purchases, up from 75 percent last year.

* Exchange Rates:

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

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U.S. DEVELOPMENTS

Auction Reports:

Through the 45^th sale day of the 1996/97 U.S. burley and dark tobacco auction season, total gross sales of U.S. burley tobacco (type 31) reached 254,045 metric tons, up 8 percent from last year when 234,155 tons were sold during the same 45 day period. Prices for type 31 are averaging $4.24 per kilogram so far this year, up 15 cents per kilogram from last year. So far this year no type 31 tobacco has gone under loan. Sales of Virginia fire-cured (type 21), eastern district fire-cured (type 22), western district fire-cured (type 23), greenriver (type 36), and Virginia sun-cured (type 37) tobaccos are reported to be higher so far this year. Sales of one sucker (type 35) are unchanged from last year. Prices are averaging higher in all markets so far this year when compared to last year, while loan take is lower.

United States Tobacco Auction Update
Burley and Dark-Type Tobaccos
March 20, 1997

Source: Daily Market News Summary No. 126

U.S. TRADE SUMMARY FOR JANUARY 1997

U.S. unmanufactured tobacco exports for January 1997 totaled 19,914 metric tons, valued at $126.5 million. This represents a 18 percent increase in quantity and a 22 percent increase in value when compared to January 1996. The leading U.S. leaf export markets so far in 1997 are: Germany, 4,187 tons; the United Kingdom, 3,139 tons; Turkey, 2,341 tons; Belgium/Luxembourg, 1,897; Japan, 1,074 tons; and the Netherlands, 999 tons.

Flue-cured exports in January 1997 reached 12,834 metric tons, valued at $92.7 million. This is up 21 percent in quantity and 28 percent in value from January 1996. The leading U.S. flue-cured export markets in January 1997 were: Germany, 3,183 tons; Thailand, 3,139 tons; Turkey, 1,384 tons; the Netherlands, 708 tons; Denmark, 591 tons; and Switzerland, 533 tons.

Burley exports in January 1997 totaled 2,678 tons, valued at $19.9 million. This is up 150 percent in quantity and up 161 percent in value from January 1996. The leading U.S. burley export markets in January 1997 were: Turkey, 956 tons; Germany, 399 tons; Malaysia, 303 tons; Switzerland, 275 tons; and the Philippines, 250 tons.

U.S. cigarette exports in January 1997 totaled 15.8 billion pieces, valued at $330.0 million. This is up 4 percent in quantity and up 11 percent in value from January 1996. The leading U.S. cigarette export markets in January 1997 were: Japan, 4.6 billion pieces; Belgium/Luxembourg, 2.9 billion pieces (much of which is re-exported); the Russian Federation, 1.3 billion pieces; Lebanon, 890.6 million pieces; and Saudi Arabia 861.5 million pieces.

U.S. exports of bulk smoking tobacco in January 1997 totaled 3,853 tons, valued at $27.2 million. This is up 23 percent in quantity and up 13 percent in value from January 1996. The leading export markets in January 1997 were: Belgium/Luxembourg, 1,262 tons; Poland, 455 tons; Turkey, 447 tons; the Netherlands, 387 tons ; and Switzerland, 334 tons.

U.S. unmanufactured tobacco imports for consumption (duty paid) in January 1997 totaled 40,257 tons, valued at $165.3 million. This is up 64 percent in quantity and up 115 percent in value when compared to January 1996. Imports of oriental tobacco, the leading tobacco type imported by the United States, reached 21,217 tons, valued at $96.5 million in January 1997. This is 118 percent higher in quantity and 145 percent higher in value when compared to January 1996. Flue-cured imports in January 1997 totaled 5,534 tons, valued at $21.5 million, up 42 percent in quantity and up 36 percent in value from January 1996. Burley imports in January 1997 reached 6,488 tons, valued at $26.8 million, up 93 percent in quantity and up 114 percent in value from January 1996. U.S. imports of stems and scrap tobacco in January 1997 totaled 4,613 tons, valued at $11.5 million, down 9 percent in quantity but up 182 percent in value from January 1996. The leading suppliers of unmanufactured tobacco imports for consumption in January 1997 were: Turkey, 17,012 tons; Brazil, 6,648 tons; Greece, 2,961 tons; Malawi, 2,764 tons; Macedonia, 1,674 tons; and Thailand, 1,600 tons.

U.S. general imports (actual arrivals) of unmanufactured tobacco in January 1997 totaled 26,710 tons, valued at $106.7 million. This represents a 15 percent decrease in quantity and an 8 percent increase in value from January 1996.

U.S. TOBACCO TRADE, 1996-97

1/ U.S. Tariff Schedule line items subject to the tariff-rate-quota (TRQ) include flue-cured and light air-cured tobacco, including burley, which are used in the manufacture of cigarettes for consumption in the United States.

2/ A TRQ of 3,000 metric tons is available to all countries, other than the 9 designated quota recipient countries, and is allocated on a first come/first served basis.

NOTE: The TRQ is administered on a September 13 - September 12 trade year.

SOURCE: U.S. Customs Service.

MARCH 1997

TARIFF-RATE-QUOTA UPDATE
U.S. Tobacco Imports Subject to Tariff-Rate-Quota 1/
September 13, 1996 Through March 16, 1997 Metric Tons

1/ U.S. Tariff Schedule line items subject to the tariff-rate-quota (TRQ) include flue-cured and light air-cured tobacco, including burley, which are used in the manufacture of cigarettes for consumption in the United States.

2/ A TRQ of 3,000 metric tons is available to all countries, other than the 9 designated quota recipient countries, and is allocated on a first come/first served basis.

NOTE: The TRQ is administered on a September 13 - September 12 trade year.

SOURCE: U.S. Customs Service.

Last modified: Wednesday, November 26, 2003