Category: Leaf

  • Losing Interest

    Losing Interest

    The number of farmers who have registered to cultivate tobacco in Zimbabwe is 15 percent lower than it was this time last year.

    Statistics from the Tobacco Industry and Marketing Board show that as of Nov. 30, 140,257 farmers had registered to grow the crop, down from 165,130 last year, while hectarage under tobacco crop dropped to 35,998 hectares from 42,000 hectares.

    Industry representatives attribute the decline to currency reforms and poor prices in the past selling season.

    “Truth be told, farmers have lost interest in tobacco farming,” said the Zimbabwe Commercial Farmers Union president, Shadreck Makombe. “They felt cheated from last season. The cost of labor input was not commensurate with their earnings.”

    In the past season, the average price of the golden leaf was $2 per kg, down from $2.92 the previous season.

  • Warning Against Overproduction

    Warning Against Overproduction

    The Tobacco Board of India has asked farmers to refrain from growing more than the authorized crop among indications that tobacco production might reach 100 million kg in the Prakasam and Nellore districts, reports The Hindu.

    Board chairman Y. Raghunatha Babu said that the farmers, in their own interest, should restrict themselves to growing the crop in the permitted acreage so that they could take advantage of the supply and demand situation at the time of marketing.

    “Overenthusiasm now will mean that they will have to burn their fingers at the time of marketing and paying penalty for the excess crop,” he cautioned.

    Regulators have authorized a crop of 86 million kg for the upcoming growing season.

  • Protecting the Environment

    Protecting the Environment

    Independent tobacco dealer NewCo recently started to dispatch its leaf samples in biodegradable, pesticide-free cotton bags, rather than in traditional plastic bags.

    Rainer Busch, the company’s principal, said that the move away from plastic is part of NewCo’s growing effort to provide for a sustainable future.

    The printed, cotton bags are considerably more expensive than are plastic bags, though, as Busch points out, their extra cost is irrelevant when set against the cost of sample consignments and, especially, against the positive contribution the bags will make to the protection of the environment.

    The first batch of 2,000 cotton bags, comprising 1,000 bags in each of two sizes, were received earlier this week at NewCo’s offices in Friedberg, Germany. They will be used for the dispatch of all samples unless a client insists on the use of plastic bags, something Busch believes is unlikely.

    In another change, NewCo will dispatch scraps and DIET tobaccos in carton boxes rather than in hard plastic boxes or plastic bags.

    With about 1,000-1,500 sample bags expected to be dispatched by NewCo during the next 12 months, the positive impact on the environment will not be huge, but, as Busch says: “Each of us can do something to help—we can stop using plastic bottles, use bicycles and public transport, and buy food fresh from the city market instead of at the supermarket”.

    The new bags will be on display at NewCo’s stand at the TABEXPO exhibition due to be held at the RAI Exhibition and Convention Centre, Amsterdam, the Netherlands, on Nov. 12-14.

  • Registrations Down

    Registrations Down

    Registrations to produce leaf tobacco in Zimbabwe are down 16 percent following a growing season characterized by drought, falling prices and challenges obtaining foreign currency payments, reports The Herald.

    As of Nov. 8, 136,762 farmers had registered to grow tobacco during the 2019–2020 season, down from 162,028 during the corresponding period last year, according to the Tobacco Industry and Marketing Board (TIMB).

    In some areas last season, the crop succumbed to drought while in parts of the country, it suffered premature ripening, compromising quality and weight—and thus compensation.

    Depressed prices during the season were compounded by rules preventing growers from receiving foreign currency payments in cash.

    During the marketing season, prices are calculated in U.S. dollars, but farmers are paid the equivalent in local currency using the interbank exchange rate. Prices ranged between $2.99 per kg down to just $0.10 per kg depending on the quality of the crop.

    Tobacco deliveries generated just over $530 million this year, compared to about $737 million last year.

    TIMB Chief Executive Andrew Matibiri said grower registrations might still increase as farmers start planting their crops.
     

     

     

     

     

  • Malawi Leaf Imports Halted

    Malawi Leaf Imports Halted

    The U.S. government has suspended all imports of tobacco from Malawi over child labor allegations, reports The Guardian.

    U.S. Customs and Border Protection on Friday issued a “withhold release” order on tobacco from Malawi, meaning shipments arriving in the United States will be
    detained at the port of entry. Importers will have to prove the tobacco is not produced with labor prohibited under U.S. law to have the shipments released.

    The ban follows the news that human rights lawyers are to bring a case against British American Tobacco (BAT) in the high court in London over child labor in Malawi’s tobacco fields.U.K. law firm Leigh Day alleges that BAT is responsible for the low price paid for the leaf in Malawi, which keeps tenant farmers in such poverty that they have no choice but to make their children work in the fields.

    BAT says its core policies “specifically state that we do not condone forced, bonded or involuntary labor and that we do not condone or employ child labor,
    and [we] seek to ensure that the welfare, health and safety of children are paramount at all times.”

  • Farmers Decry Tax Hike

    Farmers Decry Tax Hike

    Indonesian tobacco farmers say demand for their leaf has declined ahead of tax and price hike schedule for 2020, according to a report in Tempo. 

    The government plans to raise the cigarette excise rate by 21.56 percent on average and the cigarette retail selling price by 35 percent next year.

    Agus Setiawan, deputy secretary general of the Indonesian Tobacco Farmers Association, asked Presidential Chief of Staff Moeldoko to revisit the plan.

    The Finance Ministry’s Customs and Excise Director-General Heru Pambudi said the government was prepared to share its cigarette excise revenues with tobacco farmers, by returning a part of the take through regional governments.

    Source: Tempo

  • TC Speaks on Weak Earnings

    TC Speaks on Weak Earnings

    Inferior leaf quality and inaccurate forecasting by authorities contributed to the low prices prevailing during the 2019 Malawi tobacco selling season, reports The Times of Malawi, citing the Tobacco Commission (TC).

    Malawi sold 165.7 million kg of tobacco this year, earning $237 million at an average price of $1.43 per kg in 2019.

    The traded volumes, realization and average price attained were all lower than those attained last year when Malawi sold 202 million kg and earned about $337.5 million at an average price of $1.67 per kg.

    Initial crop estimates had indicated that Malawi would produce around 206 million hectares of tobacco, but the country produced only 165.7 million, according to the TC.

    TC CEO Kaisi Sadala said the overestimated production figure could have created the impression to buyers that the country had plenty of tobacco, thereby affecting pricing.

    Sadala said authorities would address the problem to avoid a repeat of the situation.

    The government has issued more than 50,000 tobacco growing licenses for the 2019–2020 season.

  • Temporary reprieve

    Temporary reprieve

    Thailand’s excise department will temporarily reduce a tobacco tax from THB0.10 ($0.003) to THB0.03 per gram for one year, starting Jan. 1, 2020.

    The move follows complaints from tobacco farmers that the THB0.10 rate, which was introduced on May 7, was taking a toll on their incomes.

    Earlier, the excise department postponed a 40 percent tax hike by one year to Oct. 1, 2020.

    The temporary tax cut applies only to farmers who produce fine-cut tobacco and those with an annual production up to 12,000 kg

    Thailand has 10,450 tobacco growers, of whom 15 have production capacity of more than 12,000 kg a year.

    The May 7 tax hike was intended to narrow the price gap between factory-made and hand-rolled cigarettes, after many smokers switched to rolling their own tobacco.

  • Production rising

    Production rising

    Farmers in Azerbaijan had harvested 4.55 million kg of tobacco as of Oct. 14, according to the ministry of agriculture.

    The country expects to produce 8.2 million kg of tobacco this year, 9.5 million kg in 2020, 12 million kg in 2021 and 12.6 million kg in 2022. In 2018, 6.3 million kg of tobacco was harvested.

    The government expects Azerbaijan’s 2019 crop to reach a value of $45 million in 2019 and to increase by 20 percent annually until 2022.

    Last year, Azerbaijan exported tobacco worth $10 million, while imports amounted to $116 million.

    The government aims to minimize the imports of tobacco products. Tabaterra CJSC has invested $48 million in a tobacco factory in the Sumgait Chemical Industrial Park. The company intends to supply 80 percent of the demand for tobacco products in Azerbaijan.

  • Higher quota promised

    Higher quota promised

    Malawi’s minister of agriculture, irrigation and water development, Kondwani Nankhumwa, has assured growers that the government would increase their production quota to meet demand.

    As the 2019 tobacco marketing season nears its end, some growers have reportedly been unable to bring their tobacco to the selling floors because their production quotas have been exhausted.

    To date, Malawi growers have sold 147.2 million kilograms at all four tobacco selling floors against the required demand of 149.6 million kilograms.

    Tobacco Commission (TC) CEO Kayisi Sadala said all bonafide growers who produced tobacco beyond their allocated quotas by more than 10 percent would have to apply for quota uplift at the commission.

    The Limbe, Chinkhoma and Mzuzu auction floors will stop selling tobacco on Sept. 13 while Lilongwe is expected to close on Sept. 18, 2019.