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U.S. DEVELOPMENTS
Auctions:
EPA Proposed Regulations will Affect Tobacco Exports: EPA is proposing new regulations for the fumigant phosphine, which is used to control the cigarette beetle during the storage of tobacco. Phosphine is also used to control pests in railroad cars for peanuts, soybeans, and grains. The EPA proposed "Risk Mitigation Measures", which requires a 500 feet buffer zone during application, would affect 95 percent of the tobacco warehouses in the United States. Without an effective fumigant, leaf quality is expected to suffer, thus reducing the United States’ ability to compete with other producers of high quality leaf tobacco. The projected loss could be as high as $1.5 billion in U.S. leaf tobacco exports. The new law could also encourage more U.S. companies to move their tobacco processing overseas.
Auctions:
U.S. Burley Auction Update: The 1998/99 burley tobacco auction season began Monday, November 23, 1998. Grade bid averages were mixed when compared with last years opening day. The volume of sales was heavy on opening day and the quality of offerings the improved over last year’s opening day. In Kentucky, 30.2 million pounds sold for $190 per hundred weight as compared to 28.5 million pounds valued at $189.50 per hundred weight a year ago.
U.S. Flue-Cured Auction Update: On Tuesday, November 12th, the 1998 U.S. flue-cured auction season ended. Demand during the first of the season was light and substantial amounts were placed under loans. As the auction season progressed, demand improved with bid averages higher and loan receipts lower. Through 64 days of sale, gross sales of flue-cured tobacco totaled 405,342 metric tons at an average price of $3.86 per kilogram. This represents a slight increase in sales value and an 18-percent decrease in quantity sold when compared to 1997. Also, only 9 percent of the flue-cured tobacco went under loan in 1998 as compared to nearly 18 percent in 1997.
United States Flue-Cured Auction Update Through 64 Sale Days November 12,1998 |
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1997 Season |
1998 Season |
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| Gross Sales | Loan Receipts | Gross Sales | Loan Receipts | |||
| Type | Tons |
$/kg |
Percent |
Tons |
$/kg |
Percent |
| TYPE 14 | ||||||
FL |
9,493 |
3.80 |
13.2 |
8,762 |
3.74 |
10.35 |
GA |
47,543 |
3.77 |
5.8 |
46,367 |
3.76 |
7.16 |
| Total | 57,030 |
3.78 |
7.1 |
57,036 |
3.76 |
7.67 |
| TYPE 13 | ||||||
NC |
53,104 |
3.78 |
20.5 |
36,569 |
3.78 |
15.58 |
SC |
55,069 |
3.82 |
13.6 |
45,340 |
3.77 |
17.45 |
| Total | 108,175 |
3.81 |
17 |
81,909 |
3.69 |
16.62 |
| TYPE 12 | ||||||
NC |
200,734 |
3.81 |
18.4 |
157,348 |
3.79 |
8.50 |
| TYPE 11 | ||||||
NC |
81,721 |
3.53 |
23.1 |
69,271 |
3.92 |
5.66 |
| VA | 49,341 |
3.80 |
20.0 |
41,682 |
3.78 |
5.42 |
| ALL FLUE | 497,008 |
3.80 |
17.7 |
405,342 |
3.86 |
9.22 |
Source: USDA/AMS - Daily Tobacco Market News Comparison Report.
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