WORLD DEVELOPMENTS

Highlights:

Germany: Cigarette production is projected to total 17 million pieces in 1998, down 2 percent from last year. Much of this decline is due to the relocation of production for the Eastern European markets into that region. However, despite the lower cigarette output Germany’s imports of leaf tobacco are forecast up over 3 percent in 1998 to nearly 230,000 metric tons. Much of this increase is due to the continued strong demand in Germany for quality tobaccos for the domestic market. Flue-cured imports are estimated to total 70,000 tons, up nearly 3 percent this year, while imports of burley are expected down nearly 10 percent to 31,000 tons. Oriental tobacco imports are expected to total 20,000 tons, up nearly 9 percent. The leading suppliers of Germany’s leaf imports in 1997 were the United States, Brazil, Zimbabwe, and Malawi.

Egypt: Imports of unmanufactured tobacco are estimated to reach 43,000 metric tons this year, up 47 percent due to low tobacco leaf prices in India and China and a slight increase in cigarette production. Flue-cured imports are forecast up 72 percent to 21,000 tons, while burley imports are expected to total 8,000 tons, up 40 percent. Oriental imports are predicted to reach 8,000 tons, up 31 percent in 1998.

Malawi: Burley tobacco production is forecast to be 118,000 metric tons in 1998, down nearly 12 percent from 1997. Much of the decline in production is due to heavy rains which pushed yields lower in many growing regions. Burley exports this year are expected to decrease slightly to 85,000 tons. Burley prices on the Malawi tobacco auctions are averaging about US$1.20 cents per kilogram, down 27 percent from last year.

Venezuela: Leaf production is estimated at 21,000 metric tons in 1998, up 14 percent from last year due to price agreements signed between growers and manufactures. Under these agreements, farmers are guaranteed more attractive prices, inflation indexes, and technical assistance. These agreements are expected to lead to an increase in the area planted to tobacco and improved yields. Production of flue-cured tobacco is projected to increase by nearly 23 percent to 13,500 tons this year, while burley output is expected to increase by 2 percent to 7,500 tons. Venezuelan imports of leaf tobacco are expected to drop nearly 15 percent in 1998 due to sufficient domestic production.

Domestic use of leaf tobacco is forecast to rise 2 percent this year to nearly 18,890 due to increased demand from cigarette manufacturers. Cigarette production is expected to increase 16 percent to 27 million pieces in 1998 due to new markets for Venezuelan cigarettes in the Andean countries. Cigarette exports are estimated to reach 27 million pieces, up nearly 41 percent. Domestic consumption, however, is expected to drop 41 percent to 4.1 million pieces. Consumption of cigarettes in Venezuela has been declining annually about 8 percent because of lower disposable incomes. However, price increases by as much as 35 percent are expected to have a substantial impact on consumption levels in 1998.

Auctions:

Malawi Tobacco Auction Update: Through the 5th week, the Malawi Tobacco Control Commission reported 1,599 metric tons of flue-cured tobacco were sold at auction in Malawi. Last year 684 metric tons were sold in the same number of weeks. Flue prices were 38 percent lower than last year at US$1.11 per kilogram. Burley sales in the first 5 weeks of this year's Malawi auction season totaled 5,486 metric tons, 26 percent more than last year. Prices for Burley were US$1.25 per kilogram, down about 30 percent from last season.

* Exchange Rates:
1997 U.S.$ = MK15.2363
1998 U.S.$ = MK25.8198

Zimbabwe Tobacco Auction Update: Zimbabwe’s Tobacco Marketing Board reported that 62,798 metric tons of flue-cured tobacco were sold during the first 9 weeks of the auction season for an average price of U.S.$1.42 per kilogram. Daily sales about $1.70 per kilogram. During the same period last year 77,142 kilos sold at an average price of U.S.$2.37.

Zimbabwe Flue-Cured Tobacco Auction Update
Sales Through Week 9
June 10, 1998

Exchange Rates:
1997 U.S.$ = Z$11.1870
1998 U.S.$ = Z$17.4797

Last modified: Wednesday, November 26, 2003