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Special Report
World Unmanufactured Tobacco Trade
Exports:
For 1999, world unmanufactured tobacco exports are projected to reach 1.96 million metric tons, almost equal to the level in 1998. The world’s top leaf exporting nations are: the European Union, Brazil, the United States, Zimbabwe, Turkey, and Malawi. Of the top leaf exporting nations, an increase in exports is forecast for Brazil, the United States, Zimbabwe, and China, while exports are forecast lower for the European Union, Turkey, and Argentina.
The United States exported 211,917 metric tons of unmanufactured tobacco in 1998, valued at $1.4 billion. This represents a 4-percent decrease in quantity and a nearly 6-percent decrease in value when compared to 1997. This drop is primarily due to competitive prices on the world market for flue-cured and burley tobacco and uncertainty within the tobacco industry over the tobacco settlement. U.S. leaf exports in 1998 to Malaysia, Thailand, and Korea declined on the average by 39 percent, while shipments of leaf to Japan and Turkey increased. The United States’ leading unmanufactured tobacco export markets in 1998 were: the European Union, Japan, Turkey, Thailand, Malaysia, Taiwan and the Republic of Korea. For 1999, U.S. leaf exports are expected to improve slightly to around 215,000 tons. So far in 1999, exports are up for most of the U.S. leaf export markets with the exception of Japan which is lower.
In Central America and the Caribbean, Guatemala’s leaf exports are forecast to total 9,043 tons in 1999, down from 11,074 tons last year. Much of this decline is due to an 18 percent drop in area planted to burley and lower imports by the United States, Guatemala’s leading export market. In the Dominican Republic, leaf exports are forecast to increase this year, totaling 18,059 tons. Most of the D.R.’s leaf exports are cigar wrapper type tobaccos. The demand for high quality wrapper tobaccos remains fairly strong internationally.
In South America, Brazilian exports are forecast to reach 318,000 metric tons in 1999, an increase of 6 percent from last year. Much of this rise is due to an increase in the amount of leaf available for export and lower export prices which have made Brazilian leaf more competitive on the international market. Flue-cured exports account for about 80 percent of Brazil’s total leaf trade and are forecast to reach about 255,000 metric tons this year. Argentina’s leaf exports are forecast to decrease about 11 percent in 1999, totaling 46,500 metric tons. Much of this decline is due to high world stocks and increased competition from Brazil.
In the European Union, leaf exports are forecast to decline to about 365,000 tons in 1999 due mainly to lower exports by Italy, the EU’s top leaf exporting nation. Italian exports are forecast to drop to about 90,000 tons, down from 95,701 tons last year, due to lower export prospects for flue-cured tobacco. Spain’s leaf exports are forecast to increase to 22,750 tons, up 14 percent from 1998.
In Eastern Europe and the Former Soviet Union, the most significant increase in leaf exports is in the former Yugoslavian Republic of Serbia/Montenegro. Serbia’s leaf exports are forecast to increase to about 58,000 metric tons, up from 51,942 tons last year. Uzbekistan’s leaf exports are forecast to reach 16,500 metric tons this year, up from 14,400 tons last year. High processing costs and a low exchange rate are likely to keep Uzbekistan’s leaf exports in check.
In Africa and the Middle East, Turkey’s leaf exports are forecast to reach 125,000 tons this year, down from 128,808 tons in 1998. Zimbabwe’s leaf exports are forecast to rise marginally to over 175,200 tons in 1999, up from 168,804 tons last year. For the last couple of years producers’ intentions were to export at least 175,000 tons in order to cut back on the level of carryover stocks.
In Asia, leaf exports are forecast higher for the leading exporters of China and India. China’s leaf exports are projected to increase to about 97,600 tons, up from 92,173 tons in 1998. China is increasingly interested in entering the leaf export market, but the Asian crisis has kept exports from growing as quickly as officials had hoped. India’s leaf exports are forecast to increase only moderately in 1999, totaling about 85,000 tons, due to reduced imports by Russia, India’s leading leaf export market. The Philippines is forecast to export 6,500 tons of leaf tobacco in 1999, down 39 percent from 1998 due to lower production levels.
Imports:
World leaf imports are forecast to reach 1.7 million metric tons in 1999, down from 1.81 million tons in 1998. The world’s leading leaf importing countries are the European Union, the United States, Russia, Japan, Egypt, Poland, Turkey, and the Philippines. Of the world’s top leaf importers, an increase is forecast for Japan, Poland, Turkey and the Philippines, while lower imports are forecast for the European Union, the United States, Russia and Egypt.
The United States’ imports of unmanufactured tobacco are forecast to reach 200,000 tons in 1999, down from 246,762 tons in 1998. Much of the decline in imports is due to high stock levels in the U.S. and a decline in cigarette production due to lower domestic consumption and exports. Flue-cured, burley and oriental tobaccos combined account for nearly 68 percent of U.S. unmanufactured tobacco imports. The leading suppliers to the United States of leaf tobacco are Turkey, Brazil, Argentina, Malawi, and the European Union.
In South America, Brazilian leaf imports are forecast to reach 15,000 metric tons, up slightly from 14,550 tons imported in 1998. Brazil is not a significant leaf importer due to ample domestic supplies.
The European Union, is the world’s leading importer of unmanufactured tobacco. Germany, the United Kingdom and the Netherlands combined account for almost 65 percent of the EU’s leaf imports. Germany’s leaf imports are forecast to total about 217,000 tons in 1999, down 5 percent from 1998. The United Kingdom’s leaf imports are forecast to total 147,000 tons this year, down slightly from 149,756 tons imported in 1998 as importers attempt to utilize stocks and reduce carry-over tobacco, and manufacturers decrease the production of tobacco products.
In Eastern Europe and the Former Soviet Union, Russian leaf imports are forecast to decline in 1999 to about 165,000 tons, down from 200,000 tons in 1998. Much of this decline is due to large beginning stock levels in 1999 and a reduction in the consumption of better quality cigarettes due to the economic crisis. However, despite the crisis tobacco remains one of the most prosperous industries in Russia.
In Africa and the Middle East, Turkey’s leaf imports are forecast to increase to 42,500 tons in 1999, up from 37,200 in 1998. Egyptian leaf imports are expected to remain relatively flat in 1999, totaling 55,000 tons.
In Asia, leaf imports are forecast higher for the leading importers of Japan, the Philippines and Malaysia. The Philippines is forecast to import 22,907 tons of leaf tobacco this year, up from 17,598 tons last year. Sources indicate that this is due to efforts by the industry to replenish stock levels which have fallen in recent years. Japanese imports are forecast to increase slightly to around 92,950 tons in 1999, up from 91,500 tons in 1998. Japan’s leaf use is expected to increase due to Japan Tobacco’s recent acquisition of RJR’s international cigarette manufacturing operation.
Prepared By: Arnella Trent and Anne Player, Cotton, Oilseeds, Tobacco, and Seeds Division, Foreign Agricultural Service, USDA, (202) 720-9497.
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