Category: Leaf

EU to Impose Tariffs on American Tobacco

Photo USTC
The EU is set to impose new tariffs on American tobacco this week.
In response to a fight over how much aid is given to airplane manufacturers, the EU had indicated about a month ago that it would seek approval from the World Trade Organization for retaliatory tariffs against the United States.
The new tariffs will include a 25 percent tax on American agricultural goods; on that list are “tobacco, nuts and seeds, spirits, sauces, soups and syrups, self-propelled shovel loaders, tractors and proteins,” according to The Wall Street Journal.
The EU is the world’s second-largest importer of U.S. tobacco.
Though the trade war has focused on aviation, American agriculture has been seen by the EU and by China as a particularly vulnerable sector to hit, both for its importance to the American economy and because farmers are generally seen as part of President Donald Trump’s base.
American tobacco farmers are already suffering from tariffs imposed by China as part of an ongoing trade dispute.
EU leaders are reportedly optimistic that President-Elect Joe Biden’s incoming administration will be more amenable to ending the trade wars than the current administration, but with American tariffs on European Airbus planes already in place, the EU felt it had no choice but to institute tariffs of its own.
November 11, 2020
Premium Tobacco Launches Website

Photo: OpenClipart-Vectors from Pixabay
The Premium Tobacco Group’s website, www.premiumtobaccogroup.com, is now up and running.
Following the company’s steady growth in recent years, Premium Tobacco’s management decided a website was warranted to illustrate the group’s operations. Among other things, the website highlights the compliance and sustainability policies that the group rigorously adheres to in all its origins.
“The group’s board is proud of the achievements of all employees and stakeholders in delivering year on year growth and wanted to provide a platform where these achievements could be shared,” Premium Tobacco wrote in a statement.
October 29, 2020
Japan Council Sets 2021 Leaf Prices and Cultivation Area

Photo: Kanenori
Japan’s Leaf Tobacco Deliberative Council has set the domestic tobacco cultivation area at 5,970 hectares for 2021, a decrease of 5.7 percent compared to the 2020 cultivation area.
The leaf tobacco purchase price will increase by 0.62 percent from last year to an average of ¥1,924.15 ($18.32) per kilogram for all leaf types.
The Leaf Tobacco Deliberative Council confers on matters concerning the cultivation and purchase of domestically grown leaf tobacco in response to inquiries by Japan Tobacco (JT).
Currently chaired by Yoshitsugu Minagawa, the council consists a maximum of 11 members, appointed by JT and approved by Minister of Finance from among representatives of domestic leaf tobacco growers and academic scholars.
October 26, 2020
Tobacco Growers Convene Online

The International Tobacco Growers Association (ITGA) will hold an online meeting, due to Covid-19, with its community of growers on Oct. 28, 2020 at 1 p.m. Western European Time in Portugal to celebrate World Tobacco Growers’ Day.
“This meeting aims to celebrate and thank the importance of the role of tobacco growers in the economies and social and rural environments of their regions and in these times of pandemic particularly, continuing with the activities inherent to the sector to ensure the proper functioning of value chains,” the organization wrote in a statement.
The session will be composed of the technical staff of the ITGA, growers’ associations from around the world and invitees.
The session is free to attend.

October 26, 2020
PMFTC Vows Support for Filipino Farmers

Photo: PMFTC
Philip Morris Fortune Tobacco Corp. (PMFTC) plans to spend more than $100 million on leaf from Filipino farmers over the next few years, reports Business World Online, citing company officials.
“While dependent on tobacco industry dynamics and the government’s excise tax policies, we anticipate spending approximately $130 million for more than 45,000 tons of Philippines green tobacco leaf over the next three years,” said PMFTC President Denis Gorkun in a letter addressed to the secretaries of Finance and Agriculture departments.
According to Gorkun, Philippine leaf production has been falling in the wake of recent tax hikes on tobacco products and the expected surge in the illicit trade of cigarettes because of an increase in prices.
A new round of excise tax increases on tobacco and vapor products took effect this year after Republic Act No. 11467 was signed into law in January.
PMFTC sourced 43 percent of its leaf purchases from local farmers in 2019, both directly and through suppliers.
PMFTC is also contemplating a $1 million investment to boost the National Tobacco Administration’s capacity to test aerosols and check product compliance.
The company will continue its program that helps 15,000 tobacco farmers in tobacco-producing provinces become more competitive, said Gorkun.
“We would also like to take this opportunity to assure PMFTC’s support for reasonable regulations applicable to tobacco products. The development of balanced and fair regulations will not only protect the interest of various stakeholders but also ensure the sustainability of the tobacco industry and the livelihood of our Filipino tobacco farmers, especially with the economic challenges we are facing today,” he said in his letter.
Finance Secretary Carlos G. Dominguez III and Agriculture Secretary William D. Dar earlier asked tobacco manufacturers to buy more from local farmers and help the industry recover from the impacts of the coronavirus disease 2019 (COVID-19) pandemic.
The lockdowns and other restrictions imposed to curb the spread of the disease has affected the flow of agricultural goods including tobacco.
Japan Tobacco International on Monday said it would increase its purchases of Philippine tobacco to 4.6 million kg next year.
Philippine law requires tobacco companies in the country to buy at least 15 percent of their leaf requirements from local farmers.
October 21, 2020
JT Approves Domestic Burley for Consumption
Japan Tobacco (JT) has cleared this year’s burley harvest in Japan for use in its cigarettes.
Since the accident at the Tepco Fukushima Daiichi nuclear plant in 2011, JT has been conducting pre-purchase radioactive material tests of domestic leaf tobacco and several other tests at each stage of its production process.
Tests for this year’s burley have now been completed. None of the leaf tobacco had traces of radioactive material exceeding the JT standard value (radioactive cesium: 100Bq/kg), the company confirmed in a statement.
JT will continue with its scheme of testing domestic leaf tobacco after purchase, to test and monitor at each stage of the productions process several times.
In related news, JT announced that it will discontinue disclosure of pre-purchase test results for domestic leaf tobacco after this report (2020).
Recently, in radioactive material testing on agricultural products conducted by Fukushima Prefecture and other prefectures, there have been virtually no cases where the traces of radioactive material exceeded the standard values, and the company’s survey is on the decline.
In addition, no cases exceeding JT standard value have been observed in the company’s test results.
JT will continue with its scheme of testing domestic leaf tobacco upon purchase.
October 16, 2020
Leaf Traders Report Losses in Zimbabwe

Photo: Taco Tuinstra
Several tobacco merchants have seen losses estimated at $20 million by some industry players due to lower than expected output and side marketing, reports The Herald, citing the Tobacco Industry and Marketing Board (TIMB).

Due to drought, there was a 29 percent drop in crop production to 179 million kg from 252 million kg last year. This year’s crop projection was 233 million kg.

Andrew Matibiri, TIMB CEO, said that side marketing is “rampant;” about 80 percent of tobacco farmers in the country are financed under contract schemes. “Side marketing takes place when parties to the contract violate the agreement, either when a farmer chooses to sell to other merchants or when a company buys from farmers it has not contracted,” according to the Herald. This practice almost caused the cotton industry to collapse.

Many tobacco farmers cannot borrow from banks to finance their operations, so they go into contract arrangements where merchants finance the farmers and then recover their money from the crop proceeds. Due to travel restrictions to stop the spread of the coronavirus, side marketing was more prevalent, and some merchants took advantage of that by buying directly from farmers.
September 21, 2020
MLT Cuts Production in Mozambique

Photo: Taco Tuinstra
Mozambique Leaf Tobacco (MLT) plans to reduce production in Niassa during the upcoming growing season due to difficulties of selling leaf during the Covid-19 pandemic, reports Club of Mozambique.
Claudio Ferreira, MLT manager for the Niassa and Zambezia provinces, told Noticias that some countries that are potential markets for Mozambican tobacco have reduced their imports significantly to protect the health of their citizens during the pandemic. Health experts believe the inherent risks of smoking are exacerbated by Covid-19.
“The World Health Organization has also been advising smokers to abandon tobacco, and these appeals are being listened to”, said Ferreira.
Ferreira said MLT will work with 36,500 smallholder growers this season, about 4,000 less than in the 2019-2020 year. The area under tobacco cultivation will shrink, he added, but did not say by how much.
Niassa Governor Judite Massenguele said the provincial agricultural directorate has already begun to persuade tobacco farmers to switch to crops such as cotton, soya and sesame.
The Niassa government is also eager to set up a tobacco processing plant in the province, believing that this will create jobs. But so far, no private sector partner seems interested in such a plant.
MLT, a subsidiary of Universal Corp., operates a tobacco processing plant in Tete Province.
September 17, 2020
Zimbabwe: Tobacco Has Kept Covid at Bay

Photo: Taco Tuinstra
Zimbabwe has kept Covid-19 at bay during the 2020 tobacco selling season, reports The Sunday Mail. According to the Tobacco Industry and Marketing Board (TIMB), here have been no reported cases of infection at tobacco auction floors since marketing began on April 29.

Tobacco sales have traditionally concentrated in the Zimbabwe’s capital, Harare. To prevent spread of the coronavirus, the TIMB distributed sales throughout the country. Sales this year also took place in Manicaland, Mashonaland West and Mashonaland Central. The Boka Tobacco Floors, for example, established new sales floors in Karoi, Mvurwi and Rusape.

The TIMB also banned informal trading outside the sales venues. Farmers were not allowed to sleep outside the floors while waiting to sell the commodity.

“I am pleased to say that there has been no confirmed case(s) of the coronavirus infection at all the floors. As the tobacco industry regulator, we put in place strict measures that are meant to curb the spread of the disease, and it has worked thus far,” said TIMB chief executive officer Andrew Matibiri.
Tobacco Reporter covered Zimbabwe’s unusual 2020 selling season in depth in its June print edition.
September 14, 2020
Zimbabwe Deliveries Exceed 181 Million Kg

Photo: Taco Tuinstra
Tobacco farmers in Zimbabwe have earned US$452 million from leaf sales to date this season, reports The Herald citing statistics from the Tobacco Industry and Marketing Board.
Tobacco deliveries have surpassed 181 million kg as contract floors continue to receive leaf despite the curtain coming down on the selling season for auction floors late last month.
The 2020 tobacco auction season closed on August 28.
The volume received so far is 24 percent smaller than that sold by farmers during the same period last season.
Auction sales were down due to the decentralization that was implemented to avoid the spread of the coronavirus.
On day 89, farmers had sold 171.5 million kg of tobacco worth US$426 million through the contract floors, while auction floors sold a cumulative 9.1 million kg of tobacco worth US$27.7 million.
The highest price offered by buyers at the auction floors remained at US$4.99 per kg, while that of the contract floors was US$6.60 per kg.
Following a radical program of land reform, Zimbabwe’s tobacco business is now dominated by small-scale growers.
Tobacco Reporter last covered the market in-depth in 2018.
September 10, 2020