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Highlights:
Turkey: Leaf production in 2000 is expected to decrease by 8 percent to 238,600 metric tons as a result of government efforts to limit production. Production in 1999 reached 260,000 tons, exceeding domestic consumption. Consequently, stocks are expected to rise nearly 8 percent in 2000. Oriental leaf accounts for 96 percent of Turkey’s leaf production and is expected to reach 230,000 tons in 2000, down from 252,000 tons in 1999. Oriental tobacco exports were reported low at 79,425 tons during the first eight months in 1999, as compared to record levels in 1996 and 1997. Industry sources blame depressed oriental tobacco sales on decreased cigarette consumption in the United States and economic problems in Russia.
Imports are forecast to increase to 44,500 tons in 2000, up 3 percent, as a result of the growing domestic cigarette market. Cigarette production in 1999 and 2000 is estimated at 120 billion pieces and 122 billion pieces, respectively. Total domestic consumption is projected to increase slightly to 113.5 billion pieces in 2000, compared to 111.5 billion pieces in 1999. The market share of oriental brands decreased in 1999, while value blended brands captured a larger share. Market share of full flavor brands remained constant.
Sources also report that the Turkish government eliminated the US$3.00 per kilogram customs funds charge on tobacco imports but increased the import duty on leaf tobacco from 25 percent ad valorem to 81.9 percent in an effort to align its custom regulations with the European Union.
Zimbabwe: Sources reported that the 1999 flue-cured crop reached 192,100 metric tons, up nearly 4 percent. Flue-cured quality was characterized as fair to good with a range of styles suitable for most merchants. However, prices were described as poor initially, but recovered in the second half of the season. The average price received was Z$66.23 (US$1.74) per kilogram, compared to Z$34.74 (US$1.72) per kilogram in MY 1998 and Z$26.58/kg (US$2.23) in MY 1997. Production is expected to increase by 4 percent to 200,000 tons in 2000, as a result of sufficient rains. Sources also report that the Government of Zimbabwe will cut the 10- percent levy on tobacco sales to 5 percent in 2000 due its adverse effects on the growers.
Canadian Flue-Cured Auction Update: Through the 48th sale day of the 1999/2000 Canadian flue-cured tobacco marketing season, the Ontario Flue-Cured Tobacco Growers’ Marketing Board reports that 30,927 metric tons of flue-cured tobacco have been sold. This is a marginal increase in sales compared to the same period of last year. Prices in Canadian currency are averaging $3.46 (US$2.35) per kilogram, slightly lower than last year. So far this year, sales of "A" graded leaves account for about 65 percent of purchases, down from 69 percent last year.
Highlights:
Flue-Cured Purchase Intentions: The U.S. Department of Agriculture announced that U.S. cigarette manufacturers plan to purchase 286 million pounds (farm sales weight) of flue-cured tobacco from the 2000 crop. Major domestic cigarette manufacturers are required by law to report intended purchases of flue-cured tobacco from the U.S. auction markets and producers annually to USDA. These data along with the average level of exports for the preceding three years and the amount of flue-cured tobacco needed to attain reserve stock levels are used to determine the annual flue-cured tobacco marketing quota.
Provisions of the 2000-Crop Flue-Cured Tobacco Program: The U.S. Department of Agriculture announced that the national marketing quota for the 2000 crop of flue-cured tobacco is 543 million pounds, down from the 1999 quota of 666.2 million pounds. The national marketing quota was based on the following:
Purchase intentions by domestic cigarette manufacturers: 286.0 million pounds
Unmanufactured exports (3 year average): 334.1 million pounds
Reserve stock adjustment: -92.9 million pounds
Secretary’s discretionary adjustment: 15.8
2000 Flue-Cured Quota: 543.0 million pounds
Price Support Grade Loan Rates for Cigar Binder Types 54-55 Tobacco: The U.S. Department of Agriculture issued price support grade loan rates for the grades of 1999 crop cigar binder tobaccos, type 54 and 55. The rates for cigar binder, types 54 and 55, range from 40 cents to $1.50 per pound. The 1999 rates are based on the average support level of $1.238 per pound announced March 1,1999, for types 54-55 and 42-44. For 1998, the average support level was $1.212 per pound.
1999/2000 U.S. Burley Auction Update: Through the second week of the burley tobacco auction season prices were fairly steady, despite a decline in the quality of marketings. Loan receipts remained high, compared to last year, and volume was heavy. Total gross sales of U.S. burley tobacco (type 31) reached 161,751 tons, down 5 percent from the same period last year. Sales of Virginia fire-cured (type 21) and Virginia sun-cured (type 37), and green river tobacco (type 36) are reported to be higher so far this year. Sales of eastern district fire-cured (type 22) and western district fire-cured (type 23) are schedule to begin in January 2000.
U.S. TRADE SUMMARY FOR JANUARY-OCTOBER 1999
U.S. unmanufactured tobacco exports for January-October 1999 totaled 162,606 metric tons, valued at $1.10 billion. This represents a 1-percent decrease in quantity and a 4-percent decrease in value when compared to January-October 1998. The leading U.S. leaf export markets so far in 1999 are: the European Union, 87,769 tons; Japan, 24,613 tons; Turkey, 7,975 tons; the Russian Federation, 7,828 tons; Malaysia, 4,930 tons; and the Republic of Korea, 4,533 tons.
Flue-cured exports for January-October 1999 reached 69,436 metric tons, valued at $488 million, down nearly 7 percent in quantity and down 9 percent in value from January-October 1998. The leading U.S. flue-cured export markets so far in 1999 are: the European Union, 34,088 tons; Japan, 14,187 tons; Korea, 4,529 tons; Malaysia, 3,659 tons; and Turkey 2,714 tons.
Burley exports for January-October 1999 totaled 46,190 tons, valued at $377 million, down nearly 2 percent in quantity and down slightly in value from January-October 1998. The leading U.S. burley export markets so far in 1999 are: the European Union, 30,586 tons; Japan, 5,849 tons; Turkey, 2,635 tons; Philippines, 2,161 tons; and Thailand, 1,596 tons.
U.S. cigarette exports in January-October 1999 totaled 126.6 billion pieces, valued at $2.67 billion, down 27 percent in quantity and 25 percent in value from January-October 1998. The leading U.S. cigarette export markets so far in 1999 are: Japan, 59.6 billion pieces; the European Union,18.6 billion pieces (to mainly Belgium/Luxembourg which is a major transshipment point for exports to other European markets); Saudi Arabia, 8.10 billion pieces; Cyprus, 5.40 billion pieces; Lebanon, 5.01 billion pieces; and Israel, 3.77 billion pieces.
U.S. exports of bulk smoking tobacco for January-October 1999 totaled 58,949 metric tons, valued at $458 million, up 8 percent in quantity and up slightly in value from January-October 1998. The leading export markets so far in 1999 are: the European Union, 17,061 tons; Turkey, 10,511 tons; Japan, 9,247 tons; Egypt, 7,008 tons; and Poland, 4,304 tons.
U.S. unmanufactured tobacco imports for consumption (duty paid) for January-October 1999 totaled 184,843 tons, valued at $590 million, down 7 percent in quantity and 12 percent in value when compared to January-October 1998. U.S. general imports (actual arrivals) of unmanufactured tobacco so far in 1999 totaled 196,593 tons, valued at $596,653 million. This represents an11-percent decrease in quantity and an 16- percent decrease in value from the same period in 1998. These decreases are partly due to the large tobacco stocks in the United States, a fall in cigarette consumption in some markets, and the uncertainty concerning the outcome of the U.S. tobacco settlement. Imports of oriental tobacco, the leading tobacco type imported by the United States, reached 43,169 tons, valued at $195 million in January-October 1999. This is down nearly 39 percent in quantity and 44 percent in value, when compared to the same period in 1998. Flue-cured imports so far in 1999 totaled 52,463 tons, valued at $174 million, up nearly 83 percent in quantity and up 80 percent in value from January-October 1998 because of increased shipments from Brazil and Zimbabwe. Burley imports for the first ten months of 1999 totaled 35,076 tons, valued at $122 million, up nearly 28 percent in quantity and 19 percent in value from January-October 1998. U.S. imports of stems and scrap tobacco so far in 1999 total 30,119 tons, valued at $13 million, down nearly 33 percent in quantity and down 29 percent in value from the same ten-month period in 1998. So far in 1999, the leading suppliers to the United States of unmanufactured tobacco imports for consumption are: Brazil, 48,620 tons; Turkey, 34,104 tons; the European Union, 14,125 tons; Malawi, 14,034 tons; Argentina, 9,916 tons; Zimbabwe, 8,461 tons; and Canada, 7,819 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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