WORLD DEVELOPMENTS

Highlights:

Thailand: Flue-cured production in 1998 is forecast to total 25,000 metric tons farm-sales-weight, unchanged from 1997. Despite a forecasted increase in flue-cured exports, area planted to flue-cured in 1998 is expected to remain constant at 19,000 hectares. Thai growers appear unwilling or unable to increase plantings over last year due to lower leaf buying quota levels by the Thailand Tobacco Monopoly, fewer loans being made available through local banks, and higher production costs. In an effort to lower production costs, a group of large flue-cured tobacco curing operations have switched from traditional curing methods to more advanced bulk type techniques. As a result, variable costs of production for these operations are estimated to drop by 10 to 20 percent. However, the relatively high investment capital requirement will likely keep this technology from being widespread and causing an increase in flue-cured production in the near future.

Auction Reports:

Canadian Flue-Cured Auction Update: Through the 59^th sale day of the 1997/98 Canadian flue-cured tobacco marketing season, the Ontario Flue-Cured Tobacco Growers Marketing Board reports that 37,635 metric tons of flue-cured tobacco have been sold. This represents a decrease in sales when compared to the same period of last year's marketing season. Prices in Canadian currency so far this year are averaging $3.74 (US$2.58) per kilogram, down from $3.98 (US$2.91) per kilogram last year. So far this year, sales of "A" graded leaves account for over 77 percent of purchases, up from 74 percent last year.

Exchange Rates:

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

1997/98 U.S.$ = CA$ 1.45

Last modified: Wednesday, November 26, 2003