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U.S. DEVELOPMENTS
Highlights:
The U.S. Department of Agriculture announced on September 18th assessment rates for unmanufactured tobacco other than flue-cured, which are imported for consumption. The assessments will be in effect from October 1, 1997 through September 30, 1998, and are the same as for domestically-produced tobacco of a like kind for which there is a domestic price support program. The total amount of the assessment is due within 10 business days after the imported tobacco is released by the U.S. Customs Service for entry for consumption into the commerce of the United States. Failure to pay or timely pay the amount of the assessment can result in a marketing penalty being assessed for the quantity of tobacco for which such failure occurred.
The U.S. Department of Agriculture announced on September 9th that producers of 1997-crop Kentucky and Tennessee dark air-cured and fire-cured tobaccos must agree to pay assessments on all marketings of these tobaccos to qualify for price support loans. The marketing assessments will be shared equally between producers and purchasers as required by amendments to the Agricultural Act of 1949 made by the Omnibus Budget Reconciliation Act of 1990. Before reaching a final determination on the no-net-cost assessments, USDA’s Commodity Credit Corporation consulted with the grower associations through which the price support is made available.
The U.S. Department of Agriculture announced that U.S. cigarette manufacturers purchased 602.7 million pounds farm-sales-weight of flue-cured tobacco from July 1, 1996 through June 30, 1997. This compares to purchases of 617.5 million pounds last year. The purchases of 602.7 million pounds represents 126.7 percent of the manufacturers’ purchase intentions of 475.5 million pounds. The Agricultural Adjustment Act of 1938 requires each major domestic cigarette manufacturer to purchase an amount equal to at least 90 percent of its stated purchase intentions to avoid the assessment of penalty.
Auction Reports:
Through 36 sale days of the 1997 U.S. flue-cured auction season, total flue-cured gross sales reached 268,830 metric tons at an average price of $3.69 per kilogram. When compared to the same 36 day period of the 1996 U.S. flue-cured auction season this represents an decrease in sales of over 7 percent, and an decrease in the average price of nearly 7 percent. All belts are reporting lower sales with the exception of the South Carolina and North Carolina type 13 belts which reported higher sales. Over 13 percent of sales have gone under loan so far this year compared to less than 1 percent during the same period of last year.
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