A tobacco growing and processing firm yesterday urged the Philippines’ government to assess the effects of its first tax reform package before raising duties further, according to an ABS-CBN News story.
Tobacco demand had dropped since taxes were raised in 2012 and would likely go down further after this year’s duty increase, the president of Universal Leaf Philippines, Winston Uy, was quoted as saying.
“Imposing an additional tax hike will result to even less tax collection, Uy said. “Consequently, this will decrease generated revenues, part of which goes to health coverage for the poor.
“Tobacco gives the biggest contribution to the government through livelihood and employment. Why focus [on] tobacco alone? Why not focus [on] other products that contribute less than tobacco?”
Under the second package of reforms, the government will not submit its own proposal on tobacco excise taxes but will instead support a bill filed by Senator Manny Pacquiao, the Department of Finance said in a statement.
Pacquiao is seeking a unitary cigarette excise tax of P60 this year and a mandatory nine percent annual increase.
Category: Leaf
Tax regime could backfire
Turning over a new leaf
Azerbaijan is increasing tobacco production as part of a plan to expand its economic base and lessen its dependence on oil, according to an AzerNews story.
Namig Shalbuzov, an expert at the Center for Economic Reforms Analysis and Communication, said that tobacco production had been increased considerably in recent times.
He told AzerNews that while about 3,600 tons of tobacco had been produced in the country during 2016, this figure had increased by more than 44 percent to 5,200 tons last year.
The main reason for the increase, he said, had been down to the attention shown to the tobacco industry by the country’s leadership.
For instance, the purchasing price of tobacco had been increased significantly. In 2015, the price of ‘first class wet tobacco’ had been 0.16 manats ($0.90) per kg, and the price of ‘second class wet tobacco’ had been 0.08 manats per kg, while in 2016 these prices had risen to 0.25 manats and 0.15 manats per kg.
Shalbuzov said that last year, subsidies were given to tobacco producers and that support measures were expected to continue in the coming years.
In 2015, unmanufactured-tobacco exports from Azerbaijan were said to have been worth $7.4 million, while in 2016 they were worth $8 million.
Over the same period, however, the value of cigarette exports dropped from $2 million to $0.9 million.
But Shalbuzov said that Azerbaijan had a great opportunity to produce more cigarettes from local tobacco and boost exports.Sustainable plans
Zimbabwe’s tobacco industry is intensifying its reforestation program by developing woodlots of fast growing trees, according to a story in The Herald quoting the public relations manager of the Tobacco Industry and Marketing Board (TIMB), Isheunesu Moyo.
The revitalized interest in reforestation has come about because, under the Sustainable Tobacco Program, from 2020, global cigarette companies will not buy leaf tobacco produced in an unsustainable manner, which includes tobacco cured using coal.
Zimbabwean tobacco growers, particularly small-scale producers, traditionally use wood to cure tobacco. But as a result of wood poaching and massive deforestation in most farming communities, there had been a campaign to encourage farmers to use coal as an alternative source of energy.
“Confronted with this situation, it is imperative for the tobacco industry in Zimbabwe to adopt aggressive afforestation programs in order to remain competitive and relevant to the global cigarette industry,” said Moyo.
“TIMB has mobilized $2 million from its own resources for planting of trees for curing tobacco. From this resource envelope, the industry is targeting about 2,000 ha.”
The Herald reported that Zimbabwe had introduced an afforestation levy to fund the planting of woodlots, a levy that had raised more than $3 million since 2015.
However, the TIMB said it had not used these funds because it had not obtained approval to do so from the government.
“We haven’t started utilizing the afforestation fund as we await administrative processes so that we can scale up our activities and plant at least 20,000 ha of woodlots per year for the next five years,” said Moyo.
“This will be enough to cure an average 100,000 ha of tobacco, which we produce per year, and that will enable us to meet the requirements of the global tobacco cigarette companies.”Universal to webcast results
Universal Corporation is due to webcast a conference call on February 6 following the release of its results for the third quarter of fiscal year 2018 after market close on that date. The conference call, which will be in listen-only mode, will begin at 17.00 Eastern Time and will be hosted by Candace C. Formacek, vice president and treasurer.
A live webcast of the conference call will be available online at www.universalcorp.com.
A replay of the webcast will be available at that site through May 6.
In addition, a taped replay of the call will be available from 20.30 on February 6 through February 20 at (855) 859-2056, using the telephone replay identification number 2686739.Child-labor issue raised
A Maltese member of the European Parliament has asked what is being done to help prevent children working on tobacco farms.
In a preamble to her question put to the EU Commission, Marlene Mizzi said that today, thousands of child workers spent summers working on tobacco farms, often to earn money needed for books, school supplies and backpacks, or to help their parents pay the bills.
‘Many experience symptoms of acute nicotine poisoning, including nausea, vomiting, headaches, and dizziness,’ she said.
‘Public health studies have shown that tobacco farmworkers have nicotine levels in their bodies equal to smokers in the general population. ‘Moreover, it is dangerous for children to work 12 hours a day in the sun and high heat while absorbing nicotine and pesticides.
‘Working in tobacco can be perilous for adults, but it is especially harmful to children whose bodies and brains are still developing.’
Mizzi then asked: ‘Can the Commission clarify what measures it plans to take with regard to the tobacco industry, in order to protect the health of children by preventing hazardous child labour on tobacco farms?’
The question is due to be answered by the Commission in writing.Quality issues in Malawi
Concerns have been expressed in Malawi about the quality of some of this season’s tobacco, though no official assessment has yet been made, according to a story in The Times.
The concerns center around a dry spell that has hit some tobacco growing regions.
The CEO of the Tobacco Control Commission (TCC), Kaisi Sadala, was quoted as saying the dry spell was a matter of concern, but he implied that there was still time for the rains to resume and make a difference to the crop.
“We are getting reports that, in some areas, the crop has started to wither,” Sadala said.
Meanwhile, the CEO of the Tobacco Association of Malawi, Matthews Zulu, said the association was assessing the situation “to give a true reflection on the ground”.
Zulu, too, implied that there was still time for the rain to make a difference, but he added that the current situation painted a gloomy picture of tobacco production this season.
The TCC says that the results of the first round of crop assessment will be ready by the end of this month.
Figures from the TCC show that, as of early December, 41,784 farmers had registered to grow 162 million kg, short of the buyer ‘demand’ for 171 million kg.
Even so, Sadala warned that farmers who were growing tobacco without having registered with the commission might find it difficult to sell their crops on the action floors.Looking to quit
Some flue-cured tobacco growers in the Prakasam district of Andhra Pradesh, India, are willing to quit the crop if the union government will compensate them to the tune of Rs1,000,000 per barn, according to a story on The Hindu Online.
Having suffered four consecutive years of drought, some of the growers operating in the traditional Southern Black Soil (SBS) and Southern Light Soil (SLS) areas of Prakasam are keen to quit flue-cured tobacco growing if the government provides compensation for dismantling the barns permanently.
The SBS and SLS areas account for 50 percent of the tobacco grown in Andhra Pradesh.
YSR Congress Party’s chief whip in Parliament, Y.V. Subba Reddy, is due to lead a delegation of farmer leaders to New Delhi to press for a suitable financial package to be included in the Union Budget.
The proposal is being presented as being in line with the strategy of reducing tobacco production laid out by the World Health Organization’s Framework Convention on Tobacco Control.
And it is being seen as almost inevitable as drought-hit growers have been forced already to cut down tobacco curing per barn by about 20 percent and fear that further reductions could render cultivation and processing unviable.
Any tobacco reduction strategy that did not include a reduction in the number of barns would be a futile exercise, the growers say.
The Hindu story said the clamor for quitting tobacco growing had gathered steam since 2015 when the sector saw a spate of suicides among growers, forcing the-then Union Commerce Minister, Nirmala Sitharaman, to visit the area and help growers by offering compensation of Rs20 per kg for low-grade tobacco that had no takers on the regular market.Tobacco season delayed
Zimbabwe’s Tobacco Industry and Marketing Board (TIMB) says that the opening of the 2018 flue-cured tobacco selling season is likely to be delayed because of the late onset of rains, according to a story in The Chronicle.
Most of the crop is still in the fields whereas, usually at this time of the year, most growers would be harvesting and curing their crop ahead of the start of the selling season in mid-February or early March.
Last year, the marketing season opened on March 15.
No date has been set for this year’s opening of sales, some of which could be held outside Harare – in Rusape, Mvurwi and Karoi.
Tobacco is one of Zimbabwe’s major foreign currency earners that last year generated $904 million in exports, down from $933 million in 2016.
The Confederation of Zimbabwe Industries (CZI) has recognized the tobacco selling season as a period when the country’s liquidity situation improves, allowing manufacturers to access foreign currency with which to import critical raw materials.Fire-cured under threat
In the most-recent issue of his Tobacco Farmer Newsletter, Christopher Bickers poses the question: Could fire-cured tobacco production be on the way to extinction?
This question will ring a bell for anybody who attended the sixth break-out session on the first day of the 2017 Global Tobacco and Nicotine Forum (GTNF), which was staged by Tobacco Reporter in New York in September.
Bickers noted that dark fire-cured tobacco was facing a serious potential challenge from a proposal made by the Food and Drug Administration to limit levels of NNN, a tobacco-specific nitrosamine (TSNA), to no more than 1 ppm in finished smokeless tobacco products.
Although several production practices might influence NNN accumulation, Bickers wrote, the biggest factor by far was the weather during the curing season.
This was one of the points made at the GTNF – that, to a certain extent, some of the factors that influenced TSNA levels were beyond the control of the farmer.
Bickers’ piece includes some tips on the steps that a farmer can take to produce a crop that is as low in TSNAs as possible.
More information is available from Bickers at + 1 919-789-4631 or chrisbickers@gmail.com.Local buying ‘encouraged’
Indonesia is planning to make the import of unmanufactured tobacco costlier than it has been to date, and to make it conditional on the importer’s buying local tobacco, according to a story in Indonesia Investments.
The country’s Co-ordinating Minister for Economic Affairs, Darmin Nasution, has confirmed that the government plans in 2018 to raise the import tariff on unmanufactured tobacco from its current level of five percent, though it is not known what the new rate will be.
Besides the higher import tariff, a number of new rules are being formulated that, in part, will require ‘importers/distribution centers’ to absorb a certain amount of locally-produced tobacco. Only those importers that obtain a recommendation letter from the Agriculture Ministry will be able to import tobacco, and this letter will be issued only to those companies that purchase ‘enough’ tobacco from local producers.
These regulations are reportedly aimed at improving the welfare of Indonesian tobacco producers and raising government revenues.
Currently, with a five percent import duty in place, Indonesian cigarette manufacturers are said not to be ‘encouraged’ to absorb locally-produced tobacco.
Based on data from Statistics Indonesia (BPS), the value of unmanufactured-tobacco imports into Indonesia during January-July 2017 was US$318.49 million, up 16.11 percent from that of the equivalent period of 2016.
Meanwhile, Indonesia’s cigarette production is thought to have risen to about 360 billion in 2017, from 342 billion during 2016.
