Category: Leaf

  • Prices 'not much different'

    Prices 'not much different'

    Cambodia last year exported to Vietnam more than 1,000 tons of leaf tobacco valued at more than US$2 million, according to a story in The Phnom Penh Post.
    The figure marks a 24 percent increase from that of 2016, the Ministry of Commerce was quoted as saying.
    Ministry spokesman Long Kemvichet said Cambodia had last year exported to Vietnam 1,200 tons of leaf tobacco worth US$2.37 million, up from 989.75 tons worth US$1.91 million in 2016.
    In 2016, Cambodia and Vietnam agreed on preferential duties for agriculture products crossing their shared border.
    Under the one-year agreement, Cambodia could export 3,000 tons of leaf tobacco to Vietnam duty-free.
    However, Kemvichet said it was unclear if the agreement would be renewed for this year.
    “We do not have any update from our team as yet regarding the tobacco deal with Vietnam,” he said.
    Cambodia produced 9,089 tons of tobacco last season, an increase of 37 percent on the previous season’s harvest, according to figures from the Ministry of Agriculture.
    Last season’s harvest war produced on an area of 6,859 ha, which was increased by 19 percent on that used to produce the 2016 harvest.
    Neang Bros, a broker in Stung Treng district, Kampong Cham province, who buys tobacco from farmers, was quoted as saying that the price of tobacco was about 8000 riel (US$2) per kg, depending on quality.
    “I have a lot of buyers coming to my house to buy from me,” he said. “The market is better than a year before but the price is not much different.”

  • Accusations out of Africa

    Accusations out of Africa

    Wealthy Western states need to put Big Tobacco in its place and prove to the developing world that they can tame the cigarette industry through concerted, unified action, according to a story by Michael Wilcox at africatimes.com.
    Writing ahead of the eighth biannual summit in Geneva of the World Health Organization’s Framework Convention on Tobacco Control (FCTC), Wilcox said it was crucial that the signatories to the FCTC stood firm.
    As the tobacco industry tried to foist modern-day colonialism on Africa and Asia, it was urgent that the old colonial powers came to their aid.
    Wilcox started his piece by saying that, since the first American explorers brought tobacco back to Europe at the turn of the 16th century, smoking had always been a first-world problem. ‘The product may have been grown by slaves in the Americas, or farmers in Africa and Asia, but it was always marketed to a wealthy Euro-American audience,’ he said.
    ‘Yet now Big Tobacco is shifting focus, driven by declining smoking rates in its core markets. New research shows the industry is ramping up production in Africa, attempting to exploit its growing wealth and lax tobacco regulation.
    ‘This is just the latest evidence of manufacturers’ growing infatuation with the developing world, where smoking is, worryingly, already on the rise.
    ‘Now it’s time for the global community to take action, before the industry gets an iron grip.’

  • Malawi growers underpaid

    Malawi growers underpaid

    Malawi’s Burley growers are underpaid, according to a new report cited in a Maravi Post story relayed by the TMA.
    The report, entitled The Burley Tobacco Value Chain Analysis, was released by the Center For Social Concern (CFSC).
    It called for crop diversification for Burley tobacco growers and the creation of a structured market for them, because currently they were not ‘adequately compensated for their contribution in the value chain’.
    The report found very low levels of crop or enterprise diversification within the tobacco sector.
    It said that farmers understood the need to diversify their range of crops and that most of them already grew other crops, with the most popular being maize (for food), groundnuts, soybean, and beans.
    However, the consensus of the farmers was that as a cash crop, there was currently no viable alternatives to tobacco.
    “There are so many factors suggesting the leaf processing companies enjoy wider profit margins which can be passed on to other players through higher prices on the auction floors,” said CFSC programs officer Lucky Mfungwe. The Malawi Government needs to be more resolute in enforcing minimum prices to make this happen.”
    Mfungwe said that since the domestic tobacco sector was consolidated “there needs to be continuous efforts to bring in more buyers at the auction floors to help build up competition for the tobacco grown by independent farmers”.
    He called also for a “review of the contract farming mechanism to ensure that it remains beneficial to the industry in the long term”.

  • Tariffs take their toll

    Tariffs take their toll

    The impression among US leaf dealers is that Chinese buyers have decided to honor their contracts with the US Tobacco Co-operative and some individual growers they have previously contracted with, according to the most recent issue of Christopher Bickers’ Tobacco Farmer Newsletter.
    US tobacco is one of the products implicated in the trade dispute between the US and China and the dealers have apparently been led to believe that there will be no other Chinese purchases of US flue-cured this year.
    Bickers (cebickers@aol.com) reported also that the prices offered at the opening sales that took place this week at most of the flue-cured auction warehouses were not encouraging.
    Meanwhile, the first round of US tariffs on Chinese vapor products has taken effect with the imposition of a 25 percent tax on all shipments of ‘e-cigarettes, mods, batteries, and similar devices from China’, according to a Vaping360 story relayed by the TMA.
    The story said the tax would be felt by US importers, wholesalers, retail sellers, and vapers because very little domestic manufacturing existed.
    “For the vast majority of American vapers, the choice is not going to be an American-made product versus a Chinese-made product with a 25 percent tariff,” American Vaping Association president Gregory Conley was quoted as saying. “It’s only going to be the latter, which isn’t much of a choice at all.”

  • AOI name-change agreed

    AOI name-change agreed

    Alliance One International said yesterday that its shareholders had approved at the Annual Meeting of Shareholders on August 16 a change of corporate name to Pyxus International, Inc.
    The company plans to start using the name Pyxus on September 12, at which time the company’s shares will begin trading on the New York Stock Exchange (NYSE) under the symbol PYX. Until then, the company’s shares will continue to trade on the NYSE under the symbol AOI.
    The company said it would use the Alliance One ‘brand name’ for its leaf tobacco business.
    “Our transition to Pyxus International is a significant milestone in our ‘One Tomorrow’ transformation journey,” said Pieter Sikkel (pictured), president and CEO.
    “As we continue broadening our business portfolio by focusing on consumer-driven agricultural products, the new organization will enable us to become the trusted provider of responsibly produced, independently verified, sustainable and traceable agricultural products, ingredients and services.”
    Meanwhile, the Board of Directors approved changes to its leadership. Sikkel has been appointed chairman of the Board, replacing Mark Kehaya, and Jeffrey A. Eckmann will assume the role as lead independent director from C. Richard (“Dick”) Green, Jr. Both Kehaya and Green will remain members of the Board.

  • Newsletter published

    Newsletter published

    The CORESTA (Co-operation Centre for Scientific Research Relative to Tobacco) Secretariat has advised that the organization’s latest newsletter has been published and is available for download at the CORESTA website.
    Issue 51 of the newsletter includes:

    • Information on the October 2018 CORESTA Congress in Kunming, China, including details about the venue, the program, the General Assembly and elections, and a special meeting on heated-tobacco products.
    • Descriptions of the five workshops to be held during the Congress.
    • Reports by the organization’s sub-Groups on Physical Test Methods and Cigar Smoking Methods.
    • Outlines of CORESTA presentations at external events.
    • A report on a visit to the Zimbabwe Tobacco Research Board’s Kutsaga Research Station.
    • Details on the launch of a new CORESTA project on sustainability
    • A report on the most recent CORESTA Scientific Commission and Board meetings held in June.
    • A list of recently-published CORESTA technical reports, guides and new projects launched.
    • Dates of upcoming CORESTA meetings.
  • Celebrating tobacco

    Celebrating tobacco

    Duke Homestead, at Durham, North Carolina, US, is scheduled to host two free programs this month focused on the history and culture of tobacco, according to a note issued by the North Carolina Department of Natural and Cultural Resources.
    An examination of tobacco myths on August 18 and a celebration of harvesting on August 25 are expected to offer ‘a well-rounded picture of raising tobacco in North Carolina’.
    The note said that tobacco built and shaped the Durham of today thanks largely to the Duke family that started their manufacturing tobacco business in Durham.
    The August 18 program will explore myths and misconceptions about tobacco such as: What makes tobacco bad for you?; and who invented the iconic bright leaf tobacco?
    The August 25 program is an annual event that celebrates North Carolina’s farming history and culture.
    More information is available at: (919) 477-5498 or DukeHomestead.org.

  • Shisha alliance formed

    Shisha alliance formed

    Alliance One International said yesterday that its German subsidiary, Alliance One Rotag, and France Tabac Union de Sociétés Coopératives Agricoles had ‘entered into an agreement for the sourcing, processing and marketing of high-quality flue-cured Virginia shisha-style tobacco’.
    ‘Together, the two organizations will provide customers with the high-quality flue-cured Virginia shisha-style tobacco that the European region is recognized for producing,’ AOI said in a note posted on its website.
    ‘Alliance One Rotag intends to continue sourcing high-quality German and Polish flue-cured Virginia tobaccos, which will be processed with the French-origin tobaccos sourced from France Tabac in its processing facility located in Sarlat, France.’
    “Our new agreement with Alliance One Rotag is a great opportunity to expand the footprint of European shisha-style tobacco,” said Remy Losser, chairman of the Board of France Tabac.
    “Alliance One’s global presence and experience in agronomy, processing and marketing will bring tremendous added value to the French tobacco industry, and we are excited for the future of the market.”
    Meanwhile, Scott Burmeister, Alliance One’s regional director for Europe, said French, German and Polish flue-cured Virginia tobaccos were recognized worldwide for their quality and unique natures, and that the agreement would position the company to meet the needs of a growing shisha market, while continuing to serve the needs of its traditional customers. “Our agreement with France Tabac will enable us to deliver enhanced value for shisha and traditional customers as we combine France Tabac’s experience and capabilities in producing high-quality French shisha-style tobaccos with Alliance One’s international footprint.”

  • Good year ahead

    Good year ahead

    Universal Corporation said yesterday that it had performed strongly during the first quarter of what it predicted would be a good year.
    In reporting the company’s first quarter results to the end June, chairman, president, and CEO George C. Freeman, III said the company had benefited from higher carryover crop sales in several origins, particularly in its North America segment, where sales volumes in the fourth quarter of fiscal year 2018 were hampered by shipping delays from reduced transportation availability in the US. ‘We are also continuing to see robust demand for both wrapper style tobaccos and related value-added processing services. We have increased our offerings to meet demand for natural wrappers in both the United States and Europe and continue to be a leading wrapper tobacco supplier.’
    Freeman said that crop purchases were progressing as expected, with purchasing effectively completed in Brazil and well underway in Africa. ‘We are not seeing any significant supply disruptions thus far this year,’ he said. ‘Burley production volumes have recovered in Africa, and crop sizes there for both flue-cured and Burley tobaccos are coming in somewhat higher than previous estimates.
    ‘Although it is still early in our fiscal year, we are pleased with our results to date and continue to expect that our volumes will be above those achieved last fiscal year. We are also focused on our enhanced capital allocation strategy that reflects the strength of our balance sheet and demonstrates our commitment to sustainable shareholder value creation. As announced in conjunction with our 36 percent dividend increase in May 2018, our strategy has four key priorities: strengthening and investing for growth in our core tobacco business; increasing our strong dividend; exploring growth opportunities in adjacent industries that would utilize our assets and capabilities; and returning excess capital to our shareholders. In line with this strategy, we are positioning our company for ongoing success as we continue to identify areas where we can provide additional value and expand the services we provide customers in our core tobacco business.’
    Universal reported net income of $13.2 million, or $0.52 per diluted share, for the first quarter of fiscal year 2019. ‘Those results were up $9.6 million compared with net income of $3.6 million, or $0.14 per diluted share, for the first quarter of fiscal year 2018,’ the company reported. ‘The first quarter of fiscal year 2019 included a non-recurring tax benefit from the reversal of a previously recorded foreign dividend withholding tax liability that reduced income taxes and increased net income by $6.9 million, or $0.27 per diluted share.
    ‘Operating income of $8.4 million for the quarter ended June 30, 2018, improved $2.0 million, or 31 percent, compared to operating income of $6.4 million for the quarter ended June 30, 2017. Similarly, segment operating income was $8.9 million for the first quarter of fiscal year 2019, up $3.0 million compared to the same period last fiscal year, mainly as a result of earnings improvements in the North America and Other Tobacco Operations segments, partially offset by earnings declines in the Other Regions segment. Revenues of $379.7 million for the quarter ended June 30, 2018, increased by $95.1 million, or 33 percent, on higher total volumes and processing revenues and a more favorable product mix.’

  • AOI spreads its wings

    AOI spreads its wings

    Pieter Sikkel

    As part of its One Tomorrow strategy, Alliance One International is continuing to make measured investments in industrial hemp, e-liquids and legal Canadian cannabis business lines as the company builds its capabilities to position them for further success in evolving regulatory and consumer environments, said president and CEO Pieter Sikkel in announcing AOI’s first quarter results.

    ‘Our industrial hemp joint venture, Criticality, LLC, (Criticality) is taking active steps to become a leader in the production of cannabidiol hemp oil (CBD) and related consumer products,’ Sikkel said. ‘We look forward to receiving and processing hemp at Criticality’s facility in North Carolina this fall.

    ‘Our e-liquids investments continue to demonstrate positive momentum. Last month, Fontem Ventures introduced Salt of the Earth, an additional product line that is a direct result of the relationship with our Purilum joint venture and utilizes Purilum’s premium nicotine salt e-liquids.

    ‘As October 17, 2018, the effective date for legalization of recreational cannabis use in Canada, draws closer, our Canadian cannabis subsidiaries are rapidly gearing up to meet expected consumer demand beyond the current legal medicinal market. As previously announced, construction work on an additional 310,000 square feet of greenhouse and warehouse space is underway as FIGR, our wholly owned indirect Canadian subsidiary, works toward its total goal of over one million square feet of production in that market.’

    Sikkel said that the fiscal year had got off to a strong start and that AOI was building positive momentum in its leaf business and making continued progress on its One Tomorrow transformation initiative announced earlier this year.

    He said that strong operating plans had been put in place, including ‘measured inventory reductions’.

    ‘We continue to optimize our global footprint and have taken steps to capitalize on opportunities in regional markets, further positioning our leaf business to meet the evolving needs of tobacco product manufacturers…

    ‘The investments we have made in agronomy services and our track-and-trace technology remain an integral component of all aspects of our business.

    ‘As our contracted farmer base continues to increase the yields of their non-tobacco crops, we are actively working to build the value-added processes that will support the diversification of their incomes.

    ‘By keeping the farmer at the center of everything we do, we are able to confidently provide customers across all of our business lines with sustainable and traceable agricultural products, ingredients and services.’

    Alliance reported total sales and other operating revenues increased by 5.1 percent to $291.0 million as, it said, crops in South America and other origins returned to a more normalized cycle when compared to that of the same period of the previous fiscal year.
    Gross profit increased by 44.8 percent to $41.4 million, and gross profit as a percentage of sales was 14.2 percent this year, up from 10.3 percent.

    Operating income increased by $5.3 million to $4.7 million.

    Net loss attributable to Alliance One International, Inc. for the quarter improved to $0.8 million, compared with $32.5 million last year, and adjusted EBITDA improved by 93.7 percent to $19.4 million.