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Highlights:I
Venezuela: Total leaf production is expected to reach 21,550 metric tons in 1999, a 3-percent increase over last year as a result of improved management and technical assistance. Prices were reported to increase in 1999 by 14 percent to 1,370 Bs/kg ($2.30/kg) due to a new price agreement between growers and manufacturers. Under this new agreement, the inflation index will be taken into consideration for setting prices. Plus, growers will receive technical assistance. On the other hand, manufacturers are discouraging any new tobacco expansion. In 1998, crop area increased by 16 percent as compared with 1997 because of special incentives to tobacco growers. For 1999, as well as 2000, sources forecast only a minimal increase in crop area. Cigarette production continues to increase. For 1999, cigarette production is estimated to reach 30 million pieces, up by 11 percent due to increased demand in the Caribbean and Andean countries. Cigarette exports are projected to reach 24 million pieces in 1999, up 17 percent. However, domestic consumption is estimated to drop 9.5 percent due to decreased consumer purchasing power.
Malawi Tobacco Auction Update: Through the 15th week, the Malawi Tobacco Control Commission reported 75,358 metric tons of burley sales, up 5 percent. Burley prices are up 12 percent from the same period last year. So far, flue-cured tobacco sales reached 5,730 metric tons at auction. Last year 7,961 metric tons of flue-cured tobacco were sold in the same number of weeks. Flue-cured prices were slightly higher than last year.
Zimbabwe Tobacco Auction Update: Zimbabwe’s Tobacco Association reported 151,900 metric tons of flue-cured tobacco were sold during 19 weeks of the auction season for an average price of U.S.$1.72 per kilogram. At the same time last season, 151,900 metric tons was also sold at an average of U.S. $1.74.
Highlights:
U.S. Industry Buys 476 Million Pounds of 1998 Flue-cured Tobacco- The U.S. Department of Agriculture announced that U.S. cigarette manufacturers purchased 476.3 million pounds (farm sales weight) of flue-cured tobacco from July 1, 1998 through June 30, 1999, compared to 506.4 million pounds in the 1997-1998 marketing year. The manufacturers’ purchase intentions for the 1998 crop were 454 million pounds. Actual purchases were 105 percent of the intended purchases. The Agricultural Adjustment Act of 1938 requires that each major domestic cigarette manufacturer purchase an amount equal to at least 90 percent of its stated purchase intentions to avoid a penalty assessment.
USDA Announces 1999-Crop Burley Tobacco Importer Assessment Rate- USDA’s Commodity Credit Corporation announced the no-net-cost assessment rate effective October 1, 1999, on unmanufactured burley tobacco imported for consumption. Burley tobacco importers are required to pay a 6 cents per pound no-net-cost assessment rate. The assessment rate is the same as for domestically produced burley tobacco and will remain in effect through September 30, 2000. The total amount of assessment is due within 10 business days after imported tobacco is released by the U.S. Customs Service for entry for consumption into the commerce of the United States. Failure to pay or timely pay the amount of assessment due will result in a marketing penalty of $3.15 per kilogram for the amount of burley tobacco on which such failure occurred.
Auctions:
U.S. Flue-Cured Auction Update: Through the fourth week of the 1999 season, total flue-cured gross sales reached 89,432 metric tons at an average price of $3.59 per kilogram. This represents a decrease in sales of over 13 percent and a slight decrease in price when compared to the same period a year ago. About 10 percent of sales have gone under loan so far this year compared to 15 percent a year ago.
U.S. TRADE SUMMARY FOR JANUARY-JULY 1999
U.S. unmanufactured tobacco exports for January-July totaled 134,111 metric tons, valued at $876 million. This represents a slight increase in quantity but a nearly 3-percent decrease in value when compared to January-July 1998. The leading U.S. leaf export markets so far in 1999 are: the European Union, 72,911 tons; Japan, 24,610 tons; the Russian Federation, 5896 tons; Turkey, 4,954 tons; Malaysia, 3,306 tons; Korea, 3,127 tons; and Thailand, 2,609 tons.
Flue-cured exports for January-July 1999 reached 57,268 metric tons, valued at $399 million. This is down nearly 7 percent in quantity and down 10 percent in value from January-July 1998. The leading U.S. flue-cured export markets so far in 1999 are: the European Union, 27,691 tons; Japan, 14,187 tons; Korea, 3,124 tons; Malaysia, 2,146 tons; and Turkey, 1,527 tons.
Burley exports for January-July 1999 totaled 41,202 tons, valued at $337 million, down 11 percent in quantity and 12 percent in value from January-July 1998. The leading U.S. burley export markets so far in 1999 are: the European Union, 27,980 tons; Japan, 5,849 tons; Thailand, 1,596 tons; and Turkey, 1,340 tons.
U.S. cigarette exports in January-July 1999 totaled 92.4 billion pieces, valued at $1.94 billion, down 24 percent in quantity and 22 percent in value from January-July 1998. The leading U.S. cigarette export markets so far in 1999 are: Japan, 41 billion pieces; the European Union, 16.4 billion pieces (to mainly Belgium/Luxembourg, a major transshipment point for exports to other European markets); Saudi Arabia, 5.5 billion pieces; Cyprus, 3.9 billion pieces; Lebanon, 3.7 billion pieces; Israel, 2.6 billion pieces; Singapore, 2.1 billion pieces; Hong Kong, 1.9 billion pieces; and the United Arab Emirates, 1.5 billion pieces.
U.S. exports of bulk smoking tobacco for January-July 1999 totaled 36,091 metric tons, valued at $295 million, down 6 percent in quantity and down 6 percent in value from January-July 1998. The leading export markets so far in 1999 are: the European Union, 9,619 tons; Turkey, 7,071 tons; Japan, 4,835 tons; Poland, 3,860 tons; and Egypt, 3,602 tons.
U.S. unmanufactured tobacco imports for consumption (duty paid) for January-July 1999 totaled 136,208 tons, valued at $443 million, up slightly in quantity and down 2 percent in value when compared to January-July 1998. Imports of oriental tobacco, the leading tobacco type imported by the United States, reached 31,979 tons, valued at $150 million in 1999, down 40 percent in quantity and down 44 percent in value when compared to the same period in 1998. Flue-cured imports so far in 1999 totaled 42,896 tons, valued at $149 million, up nearly nearly two-fold in quantity and value from January-July 1998. Burley imports for January-July 1999 totaled 19,443 tons, valued at $64 million, up nearly 42 percent in quantity and up 45 percent in value from the same period in 1998. U.S. imports of stems and scrap tobacco so far in 1999 total 24,138 tons, valued at $10 million, down 21 percent in quantity and down 17 percent in value from January-July 1998. So far in 1999, the leading suppliers to the U.S. of unmanufactured tobacco imports for consumption are: Brazil, 40,681 tons; Turkey, 25,506 tons; Malawi, 13,845 tons; the European Union, 7,967 tons; Zimbabwe, 7,245 tons; Canada, 7,182 tons; Argentina, 5,574 tons; and the Dominican Republic, 4,979 tons.
U.S. general imports (actual arrivals) of unmanufactured tobacco so far in 1999 totaled 123,720 tons, valued at $402 million. This represents a nearly 23-percent decrease in quantity and 23-percent decrease in value from the same period in 1998.
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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