After a ‘brief disruption’ last week, flue-cured tobacco auctions had resumed in Andhra Pradesh, India, according to a story in the Hindu Times relayed by the TMA.
It was not stated how long the brief disruption lasted nor what had cause it.
It could, for instance, have been down to a technical problem, but, earlier in the year, growers, worried at the slow pace of sales, called on the Chief Minister to hold a meeting with traders.
And the disruption could have been about prices, because that has happened before. Overall, prices are said to be two percent above what they were last year, while prices in the West Godavari district are down.
According to Tobacco Board figures, growers have this year sold 85 million kg of flue-cured at an average price of Rs134.66 (US$1.96) per kg.
At the same point of last year’s sales, growers had sold 95 million kg at an average price of Rs132.00 (US$ 1.92) per kg.
According to the Times, high-grade leaf produced in the northern light soils region of West Godavari is currently being sold at an average price of Rs149 per kg (US$ 2.17) compared with Rs151 (US$ 2.20) per kg last year, while low-grade leaf is being sold below Rs80 (US$ 1.17) per kg.
Flue-cured deliveries are expected to reach 127 million kg, lower than the authorized crop size of 136 million kg.
Auctions are expected to end in September.
Category: Leaf
'Brief' auction 'disruption'
AOI to announce results
Alliance One International said yesterday that it would hold a conference call from 08.00 Eastern Time on August 2 to review its financial results for the first quarter ended June 30.
A press release reporting the company’s first quarter 2019 results will be issued pre-market and prior to the call.
Investors and analysts who want to access the call should dial (877) 260-1479, or (334) 323-0522 from outside the US, and use the conference ID 3939115.
A live audio webcast of the call will be available through the Alliance One website at www.aointl.com.
A replay of the conference call will be available for five days on (888) 203-1112, or (719) 457-0820 from outside the US, using the access code 3939115.Universal to webcast results
Universal Corporation said yesterday that it would webcast a conference call from 17.00 Eastern Time on August 7 following the release of its results for the first quarter of fiscal year 2019 after market close on that date.
The conference call, which will be in listen-only mode, will be hosted by Candace C. Formacek, vice president and treasurer.
A live webcast of the conference call will be available at www.universalcorp.com, while a relay of the webcast will be available at the same site through November 6.
Additionally, a taped replay of the call will be available from 20.30 on August 7 through August 21 at (855) 859-2056, using the telephone replay identification number 1249369.Rapid changes needed
A proposal in the US to lower the maximum amount of nicotine in legally available cigarettes to non-satisfying and non-addictive levels would cause deadly problems for years to come, according to Jeff Stier, a senior fellow at the Consumer Choice Center and a policy advisor to The Heartland Institute, writing at blog.heartland.org.
Stier described the Food and Drug Administration proposal as policy candy that provided public health groups with a head-rush, but he said that evidence was scant that it would help smokers quit. And he added that it would be a boon to the already-thriving black market for these highly addictive products.
Stier was writing on July 27, a day ahead of the one-year anniversary of the FDA’s announcement about what it called a “new comprehensive plan for tobacco and nicotine regulation” that “places nicotine, and the issue of addiction, at the center of the agency’s tobacco regulation efforts”.
‘When rolling out the multi-year plan, [FDA] Commissioner Scott Gottlieb said that “the overwhelming amount of death and disease attributable to tobacco is caused by addiction to cigarettes”,’ said Stier ‘Never was a more obvious statement more necessary, given the recent media hysteria over e-cigarettes.’
In his piece, Stier looks at the agency’s two-pronged approach to reduce smoking, the first of which involved a public dialogue about lowering nicotine levels in combustible cigarettes to non-addictive levels.
‘The second part of the plan voiced a commitment to reform regulations to foster innovation for both recreational (e-cigarettes) and medicinal (nicotine replacement therapy) products,’ he said. ‘This component of the plan gave hope to countless former smokers who are smoke-free today because of e-cigarettes.’
But, Stier said, FDA regulations already in force had put a freeze on innovation within this category. ‘And unless the FDA quickly makes regulatory changes, nearly all currently available e-cigarettes will be removed from the marketplace in just a few years,’ he warned.
Stier goes on to evaluate what the FDA has achieved one year into its plan.Growing worries for farmers
In addition to the problems caused to them by ongoing international tariff-related trade battles, North Carolina tobacco farmers face a new hurdle to selling their crop because the US Food and Drug Administration is pushing to reduce nicotine levels in cigarettes to non-addictive levels, according to a story by Cullen Browder for WRAL-TV.
North Carolina has long been the number-one tobacco-producing state in the US, and while it grows only half the amount of tobacco it did 20 years ago, changing this cash crop would impact about 1,500 farm operations across the state.
Sixty percent of North Carolina tobacco is sold overseas, and Graham Boyd, executive vice president of the Tobacco Growers’ Association of North Carolina, said the US already faced tough competition from countries that wouldn’t face the same nicotine restriction.
Both the association and the North Carolina Department of Agriculture and Consumer Services have raised concerns about the FDA plan.
“What matters to us is, does this put us at a competitive disadvantage in the marketplace from a global perspective?” Boyd said.
Meanwhile, Loren Fisher, the Philip Morris Professor in the Crop and Soil Sciences Department of North Carolina State University, said that reducing nicotine in tobacco plants was no easy task.
“Those varieties don’t exist,” Fisher said. “It would take some time with plant breeding. It would be a conventional breeding program. If you were starting at ground zero, it could take 10 to 12 years.”
Genetically modified plants would provide a quicker transition, but Fisher said international buyers were leery of GMO products.
“That is not accepted by consumers and especially our customers outside the US who purchase tobacco that we grow in the United States,” he said. “Transgenic tobacco is not acceptable.”Shifting out of tobacco
About 15 percent of the land previously under tobacco in India has been switched to growing other crops during the past three years, according to a story in the Times of India.
This switch has been brought about as a result of the Government’s crop diversification program (CDP).
The Times reported that tobacco was grown on about 450,000 ha in 15 states – about 0.3 percent of the country’s arable land – and that the agriculture ministry had reported that 67,000 ha had been switched to pulses and vegetables.
The Times, citing the ministry, reported that the switch out of tobacco had occurred in nine states and had been ‘led’ by Andhra Pradesh.
Andhra Pradesh and Karnataka are the states that produce flue-cured tobacco for export. Between them, according to the Times report, they produce just over 70 percent of India’s tobacco.
The ministry said that tobacco was a remunerative crop with a low incidence of pests and disease, and that it was therefore a preferred crop. However, growers had been motivated to make the switch with campaigns highlighting the harmful effects of tobacco and by convincing them of the long-term benefits of alternative crops.
According to the Rajahmundry-based Central Tobacco Research Institute, studies have shown that no single crop is as remunerative as tobacco is. However, it says that a remunerative cropping system rather than a sole crop can be a viable alternative to a sole tobacco crop.Time is a great stealer
According to a Zimbabwe Herald story dated July 26, the country’s flue-cured-tobacco growers have delivered a record crop of 239.8 million kg.
And, with sales due to end tomorrow, one other record could be set: the longest period in which prices have not increased.
The Herald reported that growers had been paid $700.9 million for their 239.9 million kg, which puts the average price at US$2.92 per kg.
That’s a lower average price than was paid in 1996, US$2.94.
Contracted growers fared better than did those who sold at auction. The former were paid US$603.9 million for delivering 204.5 million kg of tobacco, for an average price of US$2.95 per kg.
The latter, meanwhile, were paid US$97.0 million for delivering 35.3 million kg, for an average price of US$2.75 per kg, which means that they were paid 6.5 percent less for their tobacco than was the average grower of 1996.US using child labor
In the US, where people under 18 are barred from buying tobacco and vapor products, children as young as seven are hired to work on tobacco farms, according to a National Public Radio story relayed by the TMA.
Melissa Bailey Castillo, outreach co-ordinator at the Kinston Community Health Center in North Carolina, was quoted as saying that during the tobacco harvest season, some small farms in the state hired children as young as seven because the Fair Labor Standards Act, which governs child labor, made exceptions for small farms.
The Act allows big farms to hire children as young as 12.
According to a 2013 study conducted by Human Rights Watch, growers say they need the extra labor during the harvest season, while children from rural North Carolina say they must work to help support their families.
However, Castillo said loose federal regulations and tobacco industry policies had made the children vulnerable to the health risks from nicotine and pesticide exposure.
“Either your neighbor owns a farm, or a relative owns a farm,” Castillo was quoted as saying. “Tobacco obviously is part of that heritage, and kids have been working in it, farmers will tell you, for generations.”
The federal Government has acknowledged the health risks of tobacco farming, but it is still legal for children aged 12, with parental permission, to work on a tobacco farm of any size.
And there was no minimum age for children to work on small tobacco farms or family farms.
Tobacco is North Carolina’s most valuable crop, generating about $725 million in 2017.Growers left in limbo
The tobacco market in Lilongwe, Malawi, was suspended yesterday after hundreds of tobacco farmers protested against a decision by JTI Leaf Malawi to stop buying tobacco from farmers the company had contracted, according to a story in The Nyasa Times.
JTI officials reportedly had not been to the market since Monday and the Times said that no JTI representatives were on hand to confirm or deny a suggestion by one unnamed source that the company had accused the farmers of over-production.
However, the head of communications at Auction Holdings Limited (AHL) confirmed that there had been a stand-off between the company and the tobacco farmers.
He said there were nearly 300 tobacco bales at the Lilongwe sales floors that had been delivered by tobacco farmers contracted by JTI, but that the company was refusing to buy the leaf.
Some people at the auction said JTI had asked AHL and the Tobacco Control Commission to sell the leaf to other buyers, but that they, too, were refusing to buy it.
Meanwhile, the Times’ source reportedly said that the same type of stand-off was occurring at the Limbe sales floors, but that JTI was still buying tobacco from the Mzuzu and Chinkhoma floors.
‘The bitter tobacco farmers were meeting late afternoon on Thursday to chart the way forward following the decision by JTI to abandon them after the company had signed a mutual agreement to let the farmers grow the tobacco for the JTI,’ the Times report concluded.22 years on, prices down
With Zimbabwe’s flue-cured tobacco marketing season drawing to a close, the average price paid to growers so far is lower than it was during the full season of 1996.
That is; over the course of 22 years, getting on for a quarter of a century, the grower price has fallen.
Not by much. It’s down by 0.7 percent – from US$2.94 in 1996 to US$2.92 so far this season.
But given the price increases that tobacco manufacturers have imposed on smokers during the past 22 years, the fall in grower prices is huge.
A July 15 story in the Sunday Mail that was relayed by the TMA had it that, according to figures from the Tobacco Industry and Marketing Board (TIMB) growers had been paid US$673 million for the 230.4 million kg of flue-cured they had delivered so far, an average price of US$2.92 per kg.
By the same point of the 2017 marketing season, growers had been paid US$509 million for the 172 million kg they had delivered, an average price of US$2.96 per kg.
That is, year-on-year, the average price has fallen by US$0.04 per kg, or 1.3 percent.
The low prices need come as no surprise. In May, a story in The Daily News said that the TIMB had suspended the operations of flue-cured tobacco buyers accused of giving growers a raw deal.
The suspensions followed complaints by growers who said they were being short-changed by some of the buyers.
TIMB spokesperson Isheunesu Moyo reportedly acknowledged receipt of the complaints from the growers. “We have since stopped some firms’ operations … while investigations are being carried out pertaining to the complaints,” Moyo said.
Takura Mukomberanwa of Hurungwe West was said to have told the Daily News that growers were calling on the TIMB to investigate a “litany of malpractices such as unauthorized insurance deductions”.
Mukomberanwa said that, as things stood, it seemed that the TIMB did not care about what growers were going through.
Also in May, the associate editor of the Manica Post, Obert Chifamba, described Zimbabwe’s auction market for flue-cured as defying logic.
Chifamba said that, logically, prices would rise as the quality of the tobacco increased after the delivery of the early harvestings, but that the sad reality seemed to suggest that as the quality got better, the prices either took a tumble or hit a ceiling – a ceiling of steel or granite.
