Category: Leaf

Japanese Firm to Invest in Azerbaijan

Photo: Taco Tuinstra
A Japanese company plans to invest $40 million in tobacco growing in Azerbaijan, reports AzerNews.
The initiative was discussed during a meeting between the vice president of the National Confederation of Entrepreneurs of Azerbaijan, Vugar Zeynalov, and the vice president of the Japan International Development Co. (JIDC), Munechika Tanio.
JIDC comprises more than 1,000 investors and has been working in Azerbaijan since last year.
Tanio stressed that an initial investment has been made in tobacco, and a tobacco drying station has been built in the Oguz region of Azerbaijan. In addition, funds are being invested for this purpose in Tovuz region.
About 100 Japanese investors are expected to visit Azerbaijan in October to gather detailed information in various areas during their visit to region.
September 10, 2020
Rains Dampen Malawi’s 2020 Tobacco Earnings

Photo: Taco Tuinstra
Malawi’s 2020 tobacco selling season closed on Aug. 28 with the country realizing $173.5 million, Tobacco Commission statistics announced. According to the statistics, Malawi sold a total of 112.89 million kg of tobacco this year as opposed to 165.67 million kg sold in 2019. However, leaf prices were higher this year at an average of $1.54 per kg as compared to $1.43 per kg last year.
Tobacco Commission CEO Kaisi Sadala described this year’s growing season as a “mixed bag.” “Although prices were better this year, we traded reduced volumes of tobacco this year. Initially we had anticipated producing around 154 million kg of tobacco this season, but we ended up producing just around 112 million [kg].”
Sadala cited the general decline in production to weather impact, especially excessive rains received immediately after the second round of crop estimates.
The Malawi leaf tobacco industry has been struggling with fluctuating volumes in recent years.
Tobacco Reporter covered the country’s leaf sector in-depth in 2017.
September 4, 2020
Zimbabwe Auction Season Closes

Photo: Taco Tuinstra
Zimbabwe’s tobacco auction season ends tomorrow while contract sales remain open until further notice, said the Tobacco Industry and Marketing Board (TIMB).
The golden leaf is being sold through auction and contract arrangements with the selling season traditionally beginning in March.
This year’s selling season began in April because of the adverse impact of the Covid-19 pandemic. The delay required TIMB to make adequate preparations to curb the spread of the deadly disease.
So far, about 176 million kg of tobacco have gone under the hammer generating close to US$440 million.
Zimbabwe exports 98 percent of its tobacco leaf with tobacco receipts from the foreign markets expected to reach $1,2 billion this year, up from $904 million last year.
August 27, 2020
Pandemic Takes Toll on Malawi Leaf Earnings

Photo: Taco Tuinstra
Malawi has earned $160.2 million from leaf tobacco sales to date, down 17.5 percent from the $194.3 million it realized during the same period last year.

During the period under review, the country sold 105 million kg of all types of tobacco compared to 131.1 kg sold by end of week 16 last year, according to AHL Group.

Kaisi Sadala, CEO of the Tobacco Commission, attributed the decrease in revenue and volume to the Covid-19 pandemic and a decrease in output this season. The country also suffered from a U.S. ban on Malawi leaf imports following suspicions that some tobacco was produced by forced labor.

U.S. Customs and Border Protection recently cleared leaf from Universal Corp. and Alliance One International for entry, allowing those traders to import leaf from Malawi again.

Despite the challenges, Tobacco Association of Malawi Trust CEO Nixon Lita described the market as “fairly good.”

“We were expecting about 155 million kg, but I do not think we will reach that. We also noted that the auction market had a higher rejection rate, and this was a big concern to the farmers,” Lita said.

Meanwhile, the Tobacco Commission has announced that Lilongwe and Mzuzu markets would close on Aug. 28.
August 13, 2020
Universal Welcomes Clearance of Imports

Photo: Taco Tuinstra
Universal Corp. has welcomed a decision by U.S. Customs and Border Protection (CBP) to admit imports from its Limbe Leaf Tobacco Co. subsidiary in Malawi.
On Nov. 1, 2019, CBP issued a withhold release order (WRO) on imports into the U.S. of tobacco from Malawi based on a suspicion that forced labor was used in Malawi to produce the country’s tobacco crop.
Universal Corp. subsequently filed a comprehensive explanation of Limbe Leaf’s supply chain social compliance program, its efforts to identify and minimize the risks of forced labor on contracted farms from which it purchases tobacco in Malawi, and its ability to trace such tobacco once processed and shipped from the shipping vessel back to the individual farms on which it was produced.
CBP evaluated the company’s filing and concluded that Limbe Leaf’s program and on-farm efforts produced evidence that sufficiently supported the company’s claims that tobacco purchased from Limbe Leaf is not produced or harvested using forced labor.
The agency recently confirmed that tobacco imported from Limbe Leaf is again admissible at all U.S. ports of entry.
“Universal Corporation is committed to the sustainable production of tobacco,” said George C. Freeman III, chairman, president and CEO of Universal Corp. “Our commitment is evidenced by our Agricultural Labor Practices program and other sustainability policies, and by the implementation and maintenance of those programs and policies by our operations around the world. We are proud of Limbe Leaf’s dedication to the sustainable production of tobacco in Malawi, and we appreciate CBP’s recognition of those efforts.”
Earlier this year, CBP cleared Malawi tobacco sold by Alliance One International for entry into the U.S.
August 10, 2020
Malawi Takes Heart From IQOS Approval

Photo: Taco Tuinstra
Tobacco growers in Malawi are hoping that recent marketing orders by the U.S. Food and Drug Administration (FDA) for Philip Morris International’s (PMI) IQOS tobacco-heating device will translate into greater demand for their leaf, according to an article in The Nyasa Times.

One of the world’s leading producers of burley tobacco, Malawi has seen demand for its primary export drop in recent years due to growing health awareness and anti-smoking measures worldwide.

In 2019, Malawi realized only about $232 million after selling 160 million kg of all types of tobacco. By comparison, the country earned $361 million from the sale of 192 million kg in 2014.

On July 7, the FDA issued exposure modification orders to PMI, allowing the company tell consumers that IQOS produces fewer harmful and potentially harmful chemicals than combustible cigarettes. Earlier, the agency approved PMI’s premarket tobacco product application, allowing PMI to sell IQOS in the U.S.

The marketing orders are expected to boost demand for IQOS.

Tobacco remains Malawi’s top foreign exchange earner.
August 10, 2020
Zimbabwe: Output Expected to Stay Firm

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The Zimbabwean tobacco industry expects leaf production to hold up despite the Covid-19-related restrictions on movement and a ban on cigarette sales in neighboring South Africa, reports The Herald.
“I don’t foresee any marked change, which would lead to a reduction in the production of tobacco in Zimbabwe,” Paul Zakariya, director of the Zimbabwe Farmers Union, was quoted as saying.
“Covid-19 is just one among other major factors that may affect production,” he added, pointing to other challenges such as the rising cost of inputs.
Tobacco farmers and tobacco auctions were exempted from Zimbabwe’s lockdown and curfew regulations. To limit large gatherings of people, smaller deliveries of leaf were combined into larger ones for transport to the sales floors. And instead of attending the sales process in person, groups of farmers sent representatives. (Also see our June 2020 feature story “Silent Auction”).
The global tobacco market will reach $66,42 billion (in retail prices), increasing at an average of 2.6 percent a year between 2019 to 2024, according to a recent report published by Research and Markets.
Despite a drought in the 2018-2019 cropping season, Zimbabwe still managed to produce a record-breaking tobacco output, reaching an all-time high of 258 million kg.
In the current marketing season, farmers have so far sold 159 million kilograms of tobacco worth $390 million as trading reaches its peak under the World Health Organization Covid-19 health guidelines.
The Tobacco Industry and Marketing Board expects farmers to produce about 224 million kg of tobacco are expected this season, down from the previous year’s output level of 259.5 million kilograms owing largely to drought.
August 4, 2020
U.S. Clears Limbe Leaf Imports From Malawi

Photo: Taco Tuinstra
U.S. Customs and Border Protection (CBP) has cleared tobacco imports from Malawi by Limbe Leaf Tobacco Co.
As of July 31, tobacco imported from Limbe Leaf is again admissible at all U.S. ports of entry. CBP previously denied these tobacco imports entry into the United States based on suspicion that they were produced using forced labor.
CBP lifted its ban based on a rigorous evaluation of Limbe Leaf’s social compliance program and efforts to identify and minimize the risks of forced labor from its supply chain. According to the agency, these actions produced evidence that sufficiently supports the company’s claims that tobacco from its farms is not produced and harvested using forced labor.
Earlier this year, CBP cleared Malawi tobacco sold by Alliance One International for entry into the U.S.
August 3, 2020
Dissolution of Burley Association Debated

Photo: John Lambeth from Pixabay
Members of the Burley Tobacco Growers Cooperative Association are working towards a proposal to dissolve the organization that would lead to cash payouts for thousands of burley growers in Kentucky.
Under the proposal deal, the co-op would liquidate its investments and sell its property, which includes four million pounds of tobacco and the headquarters building located in Lexington, Kentucky. Lawyers working on the proposal said that at least $20 million would be available to growers after debts, costs and attorney fees have been settled.
The money would be distributed equally to the 3,200-3,500 growers who were members of the cooperative from the 2015 crop year through the 2019 year. If there is $20 million available and the final membership class is 3,200 growers, the cash payment would be $6,250 to each grower.
The proposal also will allocate $1.5 million towards a new organization that would advocate the interests of tobacco growers.
Fayette Circuit Judge Julie M. Goodman has been assigned to approve the settlement and has scheduled a hearing July 29 to clarify issues in the proposal. If approved, the payment would be doled out in several parts with the first check to be sent by the end of the year.
July 23, 2020
Zimbabwe Leaf Sales Earnings Up

Photo: Taco Tuinstra
Zimbabwe earned $326 million from the sale of 135.42 million kilograms of tobacco leaf since the beginning of the selling season in April, according to statistics from the industry regulator.
The Tobacco Industry and Marketing Board said the sales as of July 12 were about 18.36 percent higher than the same period last year, which stood at $275.69 million. The crop sold at an average price of $2.41 per kilogram, higher than the $1.84 during the same period last year.
July 16, 2020