WORLD DEVELOPMENTS

Highlights:

Bulgaria: Unmanufactured tobacco production is expected to reach a record high of 72,580 metric tons in 1998, slightly higher than last year. Oriental tobacco, which accounts for 84 percent of production, is expected to reach 66,304 tons due to record high yields. Ample supplies are expected to boost Bulgaria’s leaf exports in 1998 nearly 15 percent to 23,000 tons, while imports are forecast to decline 66 percent to about 2,000 tons.

China: Leaf production is expected to decline in 1998 after record output due to Government interventions. China’s area planted is expected to total 1.5 million hectares, down 24 percent from last year. Leaf production is projected to drop 26 percent to nearly 2.7 million tons (farm-sales-weight). The Asian crisis is expected to have an impact on China’s leaf exports in 1998. Exports are expected to drop 9 percent totaling 70,000 tons.

Turkey: The Government of Turkey has announced an oriental tobacco price support level of 900,000 Turkish Lira per kg for grade A tobacco, up 80 percent from last year. With Turkey’s inflation rate currently running at about 100 percent, the new price support represents a government effort to lower the annual inflation to about 50 percent by the end of 1998. The Turkish Government also hopes to lower oriental production to 200,000 tons within three years by offering price supports instead of production quotas.

Auction Reports:

Canadian Flue-Cured Auction Update: Through the 98^th sale day of the 1997/98 Canadian flue-cured tobacco marketing season, the Ontario Flue-Cured Tobacco Growers Marketing Board reports that 62,403 metric tons of flue-cured tobacco have been sold. This represents a decrease in sales of 2 percent when compared to the same period of last year's marketing season. Prices in Canadian currency so far this year are averaging $3.82 (US$2.69) per kilogram, down from $4.12 (US$3.01) per kilogram last year. So far this year, sales of "A" graded leaves account for over 79 percent of purchases, unchanged from last year.

Exchange Rates:
1996/97 U.S.$ = CA$ 1.37
1997/98 U.S.$ = CA$ 1.42

Last modified: Wednesday, November 26, 2003