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January 1999
SPECIAL REPORT
Unmanufactured Tobacco Production in Selected Countries
Global production is expected to decrease for the world largest producers in 1999. The reason for the decline is a combination of many factors: world-wide declines in cigarette consumption; global overproduction; and the uncertain outcomes from the U.S. tobacco settlement.
China, which has enormous stocks, announced plans to decrease stocks over three years. The Chinese strategy is to discourage tobacco expansion by decreasing prices. Sources expect that production will decrease by nearly 3 percent, or equal to a 100,000 metric ton decline in tobacco production. However, China's ending stocks are predicted to increase by 9 percent in 1999. Another country burdened by enormous stocks is Argentina particularly for flue-cured tobacco. Burdensome stocks are putting downward pressures on prices this year, and may continue to affect prices in 1999. Flue-cured tobacco, which accounts for over 50 percent of tobacco production in Argentina, is estimated at 67,000 metric tons (farm-sales-weight), down nearly 19 percent and the lowest in two years. Likewise, Argentine flue-cured area planted is predicted to fall approximately 20 percent. In Malawi, flue-cured planted area is projected to decrease by nearly 4 percent, and production is estimated to drop by nearly 6 percent in 1999. The sharp devaluation of Malawi's currency is affecting farmers ability to buy necessary inputs for tobacco production. However, sources state that farmers will continue to produce without necessary inputs. If this occurs, tobacco yields and quality will be affected.
Brazilian flue-cured production in 1999 is estimated to total 387,000 tons as compared to 315,000 tons in 1998. Sources are predicting a promising year for tobacco production in Brazil due to good weather.
In the European Community, flue-cured production in 1999 is expected to remain near 1998 levels of 126,210 tons.
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