Argentina: Argentine leaf production is projected to be the lowest since 1997. Leaf production is expected to drop by 3.43 percent in 1999, or to total 112,500 metric tons. A variety of factors are being blamed for this reduction. One factor is the severe weather problems affecting the northwestern flue-cured producing regions and some of the burley regions. Flue-cured production is estimated to drop to 60,000 mt in 1999 as compared to 82,400 metric tons in 1998. Another factor affecting the Argentine leaf industry is the financial crisis in Brazil. The strong real devaluation caused Brazilian leaf prices to drop and Argentine leaf prices are no longer as competitive as Brazilian leaf prices. Leaf exports are expected to drop by 21.3 percent or to total 28,000 metric tons in 1999 due to depressed world flue-cured prices and the Brazilian financial crisis. Consequently, flue-cured ending stocks are expected to increase by 14 percent in 1999.
Bulgaria: For another straight year, Bulgarian tobacco leaf production is expected to drop by 8 percent in 1999 due to low farm-gate prices. The government of Bulgaria announced that farm-gate prices would not increase this year discouraging some farmers. Sources indicated that area planted to oriental tobacco is expected to total 25,000 HA, down 5 percent in 1999. Oriental leaf production is estimated to reach 35,869 metric tons, up 4.9 percent in 1999. Oriental leaf exports are projected to reach 20,000 metric tons, up 30 percent due to construction of a new Bulgarian cigarette plant in Russia and Ukraine. Cigarette production is estimated at 38,000 million pieces, up 14 percent. Cigarette exports are predicted up by 29 percent due to expanding markets in Russia, Ukraine, and other FSU republics.
Dominican Republic: Dark air and sun cured tobacco production is expected to return to traditional levels after record high levels in 1998. Dark, air and sun cured production reached 30,500 metric tons in 1998, up 41 percent due to strong international demand for good quality cigar. Since the 1997 dark air and sun cured production peak, prices are slowly decreasing. Sources expect that dark air and sun cured production will decrease to traditional production levels of 21,000 to 23,000 tons in 1999.
India: Indias 1999 leaf production is estimated at 648,600 metric tons, up 2 percent. Flue-cured production is expected to increase by 18 percent, or 172,000 tons despite a 2- percent reduction in area planted. This increase is due to favorable weather conditions. Burley production is projected to reach 9,100 tons, up 7 percent in 1999. Leaf exports are estimated at 81,790 tons, up nearly 4 percent due to competitively priced Indian leaf and improved leaf quality. Sources expect that leaf stocks will reach a record high of 140,000 tons due to lower than expected export demand.
Japan: Japanese leaf imports for 1998 totaled 101,442 metric tons, up 3.3 percent. U.S. leaf imports which comprised 43 percent of total leaf imports, increased by 14 percent in 1998 or reached 43,800 tons. Sources expect that imported leaf will continue to replace domestic leaf due to Japans shrinking tobacco farming sector. Crop area in 1998 totaled 25,725 HA. For 1999, crop area was forecast to drop below the traditional levels of 25,000 HA. And domestic leaf production is projected to total 63,960 tons, down by 4,544 tons in 1998.
Republic of Kazakhstan: Leaf production is forecast to decline by 20 percent or to 8,000 metric tons due to shrinking demand. Leaf exports are expected to reach 800 metric tons, up 60 percent due to a decline in price for Kazakh leaf and a drive to reduce stock level. Leaf imports are expected to remain constant. Cigarette production is expected to increase to 25 billion pieces, up 12 percent in 1999. In 1998 cigarette production dropped by 8 percent due to competition from smuggled cigarettes. Sources believe that stricter measures to control smuggling as well as the 25- percent devaluation of the local currency are expected to limit both legal and illegal imports.
USDA Announces Penalty Rates on Excess Tobacco Marketings: On May 24, 1999, the U.S. Department of Agriculture announced that penalty rates will be charged producers, dealers, and warehouse operators for marketing excess tobacco during the 1999 marketing year. Section 314 of the Agricultural Adjustment Act of 1938, as amended, requires that USDA collect these assessments. The "penalty" rate is 75 percent of the average market price for that kind of tobacco for the previous marketing year. This law applies to every kind of tobacco subject to marketing quotas. When the average market prices for each kind of tobacco are determined and announced, the penalty are then calculated.
U.S. TRADE SUMMARY FOR JANUARY-MARCH 1999
U.S. unmanufactured tobacco exports for January-March 1999 totaled 66,471 metric tons, valued at $406 million. This represents a 10-percent increase in quantity and a 6- percent increase in value when compared to January-March 1998. The leading U.S. leaf export markets were: the European Union,31,387 tons; Japan,18,396 tons; Turkey, 2,674 tons; Korea, 2,479 tons; and Thailand, 2,609 tons.
Flue-cured exports for January-March 1999 reached 37,589 metric tons, valued at $25.9 million, up 37 percent in quantity and nearly 30 percent in value from January-March 1998. The leading U.S. flue-cured export markets were: European Union, 16,377 tons; Japan, 13,947; the Republic of Korea, 2,478 tons; and Thailand, 977 tons.
Burley exports for January-March 1999 totaled 9,986 tons, valued at $80 million, down 24 percent in quantity and down 25 percent in value from January-March 1998. The leading U.S. burley export markets were: the European Union, 6,068 tons; Thailand, 1,596 tons; Turkey, 1,189 tons; and the Philippines, 484 tons.
U.S. cigarette exports for January-March 1999 totaled 43.6 billion pieces, valued at $957 million, down 13 percent in quantity and 8 percent in value from January-March 1998. The leading U.S. cigarette export markets were: Japan, 18.6 billion pieces; the European Union, 9.9 billion pieces (to mainly Belgium/Luxembourg which is a major transshipment point for exports to other European markets); Saudi Arabia, 2.5 billion pieces; Lebanon, 2.3 billion pieces; and Singapore, 1.1 million pieces.
U.S. exports of bulk smoking tobacco for January-March 1999 totaled 14,887 metric tons, valued at $14.8 million, down 13 percent in quantity and down 6 percent in value from January-March 1998. The leading export markets were: the European Union, 4,912 tons; Poland, 2086 tons; Japan, 1,435 tons; Turkey, 2,391 tons; and Egypt, 1,437 tons.
U.S. unmanufactured tobacco imports for consumption (duty paid) for January-March 1999 totaled 55,923 tons, valued at $209 million, down 17 percent in quantity and down 16 percent in value when compared to the same period. U.S. general imports (actual arrivals) of unmanufactured tobacco for January-March 1999 totaled 55,811 tons, valued at $187 million. This represents a 4-percent decrease in quantity and a 2- percent decrease in value from the same period in 1998. Imports of oriental tobacco, the leading tobacco type imported by the United States, reached 16,372 tons, valued at $86 million for January-March 1999, down 49 percent in quantity and down 46 percent in value. Flue-cured imports in January-March 1999 totaled 16,692 tons, valued at $55.6 million, up nearly 82 percent in quantity and up 83 percent in value from January-March 1998. Burley imports for January-March 1999 totaled 12,099 tons, valued at $39 million, up 56 percent in quantity and 55 percent in value from the same period in 1998. U.S. imports of stems and scrap tobacco in January-March 1999 totaled 3,895 tons, valued at $1.6 million, down 55 percent in quantity and 60 percent in value from January-March 1998. The leading suppliers to the United States of unmanufactured tobacco imports for consumption for January-March 1999 were: Brazil, 11,578 tons; the Turkey, 9,901 tons; Malawi, 6,978 tons; Canada, 4,653 tons; European Union, 3,175 tons; and Zimbabwe, 2,842 tons; and Bulgaria, 2,546 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.