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Highlights:
Malawi: Reports out of Malawi indicate that despite an expected drop in production, growers are optimistic going into the 1999 burley auction season, which opened April 13th in Lilongwe and April 14th in Limbe. Burley prices through the first two days of trading averaged US$1.52 per kilogram. Analysts expect prices this year to average about US$1.45 per kilogram, a 12- percent increase from a year ago. Malawi’s burley production this year is forecast at 90,000 metric tons, down 21 percent from 1998. Flue-cured output is projected at 13,000 metric tons, down slightly from 1998, while dark-fired tobacco is expected to drop by 19 percent to 6,500 tons. Much of the decline in Malawi’s tobacco production stems from high interest rates that forced many growers out of production, and bad weather conditions in November and December which pushed yields lower.
China: The Chinese State Tobacco Monopoly Administration announced further changes in tobacco policy designed to cut surplus production and improve product quality. STMA plans to reduce area planted by 100,000 hectares and to reduce production by 100,000 metric tons in 1999. Leaf production in 1999 was revised from 2.8 million metric tons to 1.65 million tons. The 1999 area planted was revised from 1.6 million hectares to 928,000 hectares. Leaf exports are predicted to total 100,000 tons. Leaf stocks are now estimated to decline by 500,000 tons, bringing the total down to 3.3 million tons in 1999.
Auction Reports:
Canadian Flue-Cured Auction Update: Through the 108th sale day of the 1998/99 Canadian Flue-Cured tobacco marketing season, the Ontario Flue-Cured Tobacco Growers' Marketing Board reports that 68,299 metric tons of flue-cured tobacco were sold. This represents a nearly 3-percent decrease in sales when compared to the same period of last year's marketing season. Prices in Canadian currency are averaging $3.58 (US$2.42) per kilogram, down 6 percent compared to last year. So far this year, sales of "A" graded leaves account for 72 percent of purchases, down 10 percent from last year.
Canadian
Flue-Cured Auction Update FINAL |
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Quantity
in |
Average
Value per Kilogram |
||
1997/98 |
1998/99 |
1997/98 |
1998/99 |
70,267 |
68,299 |
US$2.58 |
US$2.42 |
| Source: Ontario Flue-Cured Tobacco Growers Marketing Board. | |||
Exchange Rates: 1997/98 U.S.$ = CA$ 1.42
1998/99 U.S.$ = CA$ 1.48
Highlights:
USDA Announces Referendum Results: The U.S. Department of Agriculture announced the preliminary results of the referendum for the growers of cigar-filled and binder tobaccos, types 42-44 and 54-55, to determine marketing quotas and price support in effect for 1999, 2000, and 2001 marketing years. Over two-thirds voted in favor of quotas.
Auction Reports:
1998/99 U.S. Burley Auction Update:
The 1998/1999 burley and dark tobacco auction season is now closed as the final dark tobacco auction closed April 9, 1999. Total gross sales of burley tobacco (type 31) this year reached 289,684 metric tons, down 3 percent from last year when 299,102 tons were sold. Prices for type 31 averaged $4.19 per kilogram this year, down 3 cents per kilogram from last year. And the percent of burley tobacco (type 31) placed under loan dropped to 11.42 percent as compared to 15.62 percent in 1997/1998 auction.
Price as well as quality averaged lower for dark tobacco in all markets except western district fire-cured (type 23). Dark tobaccos placed under loan were significantly higher this year as compared to last year with the exception of KY&TN eastern district fire-cured which were significantly lower.
U.S. TRADE SUMMARY FOR JANUARY-FEBRUARY 1999
U.S. unmanufactured tobacco exports for January-February 1999 totaled 43,003 metric tons, valued at $262 million. This represents a 14-percent increase in quantity and nearly 17 percent increase in value when compared to January-February 1998. The leading U.S. leaf export markets were: the European Union,18,714 tons; Japan,11,809 tons; Turkey, 2,674 tons; Korea, 2,479 tons; and Thailand, 2,057 tons.
Flue-cured exports for January-February 1999 reached 27,333 metric tons, valued at $18.5 million, up 57 percent in quantity and 47 percent in value from January-February 1998. The leading U.S. flue-cured export markets were: European Union, 11,519 tons; Japan, 9,928; the Republic of Korea, 2,478 tons; and Thailand, 976 tons.
Burley exports for January-February 1999 totaled 5,072 tons, valued at $41 million, down 7.2 percent in quantity and down nearly 4 percent in value from January-February 1998. The leading U.S. burley export markets were: the European Union, 2,152 tons; Turkey, 1,189 tons; Thailand, 1,061 tons; and the Philippines, 241 tons.
U.S. cigarette exports for January-February 1999 totaled 26.2 billion pieces, valued at $57.6 billion, down 18 percent in quantity and 14 percent in value from January-February 1998. The leading U.S. cigarette export markets were: Japan, 11.8 billion pieces; the European Union, 5.4 billion pieces (to mainly Belgium/Luxembourg which is a major transshipment point for exports to other European markets); Lebanon, 1.4 billion pieces; Saudi Arabia, 1.1 billion pieces; and Singapore, 913 million pieces.
U.S. exports of bulk smoking tobacco for January-February 1999 totaled 9,180 metric tons, valued at $83.9 million, down 24 percent in quantity and down 8 percent in value from January-February 1998. The leading export markets were: the European Union, 3,628 tons; Japan, 842 tons; Poland, 1,643 tons; Turkey, 993 tons; and Egypt, 879 tons.
U.S. unmanufactured tobacco imports for consumption (duty paid) for January-February 1999 totaled 39,739 tons, valued at $144 million, down 24 percent in quantity and down 27 percent in value when compared to the same period. U.S. general imports (actual arrivals) of unmanufactured tobacco for January-February 1999 totaled 33,992 tons, valued at $121 million. This represents a 15-percent decrease in quantity and nearly 5- percent decrease in value from the same period in 1998. Imports of oriental tobacco, the leading tobacco type imported by the United States, reached 9,888 tons, valued at $50 million for January-February 1999, down 61 percent in quantity and down 60 percent in value. Flue-cured imports in January-February 1999 totaled 12,903 tons, valued at $42.6 million, up nearly 69 percent in quantity and up nearly 63 percent from January-February 1998. Burley imports for January-February 1999 totaled 10,507 tons, valued at $34.9 million, up 52 percent in quantity and 42 percent in value from the same period in 1998. U.S. imports of stems and scrap tobacco in January-February 1999 totaled 1,840 tons, valued at $484 thousands, down nearly 68 percent in quantity and 71 percent in value from January-February 1998. The leading suppliers to the United States of unmanufactured tobacco imports for consumption for January-February 1999 were: Brazil, 8,229 tons; Malawi, 6,448 tons; the Turkey, 4,442 tons; European Union, 2,558 tons; Canada, 2,717 tons; Bulgaria, 2,463 tons; and Zimbabwe, 2,378 tons.
1 Metric Ton = 2,204.622 Pounds
1 Pound = 0.0004536 Metric Tons
1 Kilogram = 2.2046 Pounds
1 Pound = 0.4535924 Kilograms
1 Hectare = 2.471 Acres
1 Acre = 0.4047 Hectares
Dry Weight (DW) = 88 to 92 percent of Farm Sales Weight (FSW) 1/
1/ Unmanufactured tobacco's conversion from dry weight to farm sales weight varies depending on a country's cultivation and processing conditions and practices. The average conversion factor ranges from 88 to 92 percent, but it can be as low as 60 percent.
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