Production reduction
Several issues are influencing production declines of the Oriental tobacco crop.
By Timothy S. Donahue
Size matters. Oriental is the smallest and hardiest of all tobacco types, which makes growing and harvesting the crop difficult and labor-intensive. For several years, the production of Oriental tobacco has been on the decline.
Production is hindered by several factors, according to two major sources of the coveted leaf. Frederick Cramer, coordinator of Sunel Tobacco Co., one of Turkey’s oldest leaf dealers, says that weather patterns, the cost of production and farmer demographics could further reduce the crop.
One of the primary issues for farmers growing Oriental tobacco is the amount of labor required, especially during the harvest period, according to Cramer. “This is a very difficult problem to overcome,” he says. “There are many factors involved.” Harvesting is tricky because, measuring only 5–10 centimeters (2–4 inches), Oriental tobacco leaves are much smaller than those of Virginia tobacco. There are also more leaves on a single plant. This means harvesting must be done by hand.
According to Dora Gleoudis, managing director of Nicos Gleoudis Kavex, a leading Greek tobacco leaf enterprise and the largest buyer, processor and exporter of local Oriental tobacco, efforts have been made to mechanize the harvesting process, with some success. However, Gleoudis agrees that it is a difficult problem and describes three factors that hinder mechanization.
“First, the uniquely small-sized Oriental leaf makes harvesting very costly from a labor standpoint,” she says. “Then there is the undulating and rather rocky terrain that favors classical Oriental production. Thirdly, the traditional small-scale farm plot sizes diminish any potential benefits from mechanization. Consequently, using the human hand remains the only practical way for Oriental tobacco farmers to harvest their tobacco for the foreseeable future. On small-scale farms, the harvesting and curing can be contained within the family unit, requiring long hours for little return.”
Harvesting is especially problematic on larger farms, according to Gleoudis. She says that contracting and even just finding workers is becoming more difficult, not to mention costly. “These factors have increased the cost of the production quite drastically and are reflected in the ever-increasing prices paid by the industry to the growers to assist them in recovering their costs,” she says. “Inroads were also made to simplify the traditional curing methods; however, these proved entirely unsuccessful.”
Cramer says another obstacle to mechanization is cost; the machines are very expensive. “Who is going to finance these machines?” he asks. “The other alternative to reduce cost is the Vento curing system, but that has issues with the quality.” Typically, Oriental tobacco is sun-cured. In the Vento system, a “sock” is filled with loose leaves and air is blown through the sock to keep a uniform density. It is then hung in the barn and covered by a plastic sheet. “Many Oriental tobacco farmers do not have enough experience to cure in these conditions. It also requires an additional investment for the curing tent/barn,” says Cramer.
Rainy days and old age
Other issues facing Oriental tobacco farmers are the weather and aging farmers. Gleoudis says that these issues have been affecting Oriental tobacco production for many years. “The survival of tobacco production as a whole is not perceived as a priority by the EU—quite the opposite, in fact,” she says. “Weather is unpredictable, and small-scale farming is not something that younger generations are interested in following. The difficult economic conditions prevailing at present may draw some back to farming, but it is unlikely this will be [a] long-term solution.”
The average age of the Oriental tobacco farmer is about 52, according to Cramer, and the age will continue to increase as the industry loses 3 percent to 4 percent of its farmers per year. The rates of decline in a given year depend on how the competing crops are doing. “The main carrot for the farmer to grow tobacco is that we advance-pay an estimated 50 percent of the farmer’s anticipated income,” says Cramer, explaining that the advance is paid in installments from the time that the contract is signed until the start of harvesting and baling.
“Social insurance is key for the young farmer, but the cost is high, so we cannot afford to pay it, and there are no government subsidies to tobacco farmers. All the cost must be carried by the manufacturer, which makes it very expensive. There just isn’t much incentive for the younger generation to continue the family’s tobacco farming business.”
Oriental tobacco needs dry, warm summer weather in order to produce high-quality tobacco. The crop also needs dry conditions once it is transplanted, according to Cramer. “A few rains will not have too much of a negative impact on quality, but as we experienced [in 2018], the rains were heavy during transplanting, and then the continuous heat at temperatures above 35 degrees C burned/scorched the weak leaves,” he says. “Oriental is drought-resistant, but it needs a good, rainy winter to allow for enough moisture for the plant to develop during the hot, stressful months of summer.
Gleoudis says that the weather conditions during the 2018 growing season were unusually adverse. “Heavy rains in springtime and an unusually cooler summer resulted in a reduced crop of mediocre quality, affecting virtually the entire Balkan Peninsula,” she says. “This has impacted not only Oriental tobacco crops but also other nontobacco crops, notably olives, wheat and vegetables. This, however, was a possible seasonal issue and not necessarily related to climate change.”
Cramer says these extremes are becoming the norm, and the erratic weather is deteriorating the yield and quality of the Oriental production year after year. “We see this more and more frequently now,” he says.
Next generation
Regulation is also making an impact on the Oriental tobacco market, as it is with all tobacco products. However, recently proposed bans on additives for tobacco products may help increase demand for the product, but production is unlikely to increase, according to Gleoudis.
“For a number of years, Oriental production pretty much met demand, although recently, we have seen demand start to exceed supply, and this increased demand may lead to higher prices. However, production of classical Oriental is unlikely to increase in the short term due to the problems of an aging farmer base and the cost of labor we have already discussed.”
There is some hope. As the tobacco landscape changes and with new products continually coming to market, these new devices could have an impact on the Oriental tobacco market. However, opinions vary on whether the impact will be positive or negative. Cramer says that while the banning/reduction of additives should have a positive impact on Oriental usage—especially of the top grades—those gains could also be offset by products such as Philip Morris International’s iQOS heat-not-burn (HnB) device and the rapidly growing vapor industry.
“These new products could cause the demand for tobacco to drop substantially. We know that they do use Oriental in iQOS; however, the total tobacco volume in a heat-not-burn device is much less than in a traditional cigarette. That could have a critical impact on the demand,” he says. “Also, Oriental tobacco producing countries such as Greece, Bulgaria and the Former Yugoslav Republic of Macedonia are decreasing their volumes due to various factors such as cost, competing crops, farmer erosion, etc. These issues could help keep Turkey as the largest producer, and the country still has a chance to continue supplying in the years to come.”
Gleoudis disagrees. She believes that if HnB products use a higher percentage of Oriental tobaccos than traditional cigarettes, it bodes well for the crop. “Oriental tobacco carries a uniquely complex combination of flavors and sensations,” she says. “It is unlikely that synthetic flavors will ever closely mimic the true nature of classical Oriental tobacco. In any case, regardless of weather conditions, it is likely Oriental tobaccos will prevail. The crop’s unique taste and aroma are essential ingredients in both traditional and next-generation tobacco products. There is still a bright future for Oriental tobacco.”