Tag: Alliance One International

The Great Scramble

Buyers have been paying record prices to secure their shares of Brazil’s smaller-than-expected tobacco crop.

By Taco Tuinstra

On March 21, a ferocious storm tore through Brazil’s southernmost state, Rio Grande do Sul. The wind flattened numerous outdoor pavilions at the Expoagro exhibition in Rio Pardo, forcing its organizer, tobacco growers’ association Afubra, to close the event for a day and repair the damaged stands. In a more welcome development, the tempest brought relief from the heat wave that had been making life tough for those toiling in the region’s numerous fields and leaf processing facilities.

But while Expoagro reopened to large crowds and the temperature dropped to more tolerable levels in the wake of the storm, other pressures on the industry continued unabated throughout the selling season. Alliance One Brazil Leaf Production Director Samuel Streck, who has worked in the business for two decades, described this year’s crop as the most challenging in his career, and his view was echoed by many other industry veterans throughout the Brazilian tobacco sector during Tobacco Reporter’s visit to the region in March.

A significantly smaller-than-expected crop, acute labor shortages and record-high prices, along with heightened scrutiny of tobacco farming in the wake of the 10th Conference of the Parties (COP10) to the Framework Convention on Tobacco Control (FCTC), have kept the Brazilian leaf sector on its toes this year.

Low Yields, High Quality

It wasn’t supposed to be that way. When planting for the 2023-2024 crop started in May last year, the industry predicted a volume increase of about 10 percent over the previous season, when the country’s growers harvested some 605.7 million kg of all tobacco types, according to Afubra.

At first, the weather conditions appeared to validate that assessment, but then El Nino hit. The recurring weather phenomenon, which typically boosts precipitation in South America, had been anticipated but turned out much more intense than normal. From mid-July until the end of November, El Nino dumped unprecedented volumes of rain on southern Brazil, leading to flooding in lower lying areas. Accompanied by many sunless days, the wet conditions depressed yields not only in Rio Grande do Sul but also in Santa Catarina and Parana, the three southern states that together account for 98 percent of Brazil’s tobacco production. (The remaining volumes grow primarily in Bahia and are used to make cigars.)

Crop	Hectares planted	Production (million kg)	Leaf export earnings
2023	261,740	605.7	$2.66 billion
2022	246,590	560.18	$2.24 billion
2021	273,356	628.49	$1.31 billion
2020	290,397	633.02	$1.47 billion
2019	297,310	664.36	$1.99 billion
2018	297,460	685.98	$1.85 billion
2017	298,530	705.93	$1.96 billion
2016	271,070	525.22	$2.01 billion
2015	308,260	697.65	$2.06 billion
2014	323,700	731.39	$2.35 billion
2013	313,575	712.75	$3.09 billion
Sources: Afubra/SindiTabaco

Instead of a 10 percent boost, the industry was now looking at a 20 percent drop in volume from 2023. By late March, Afubra was expecting about 470 million kg of flue-cured Virginia (FCV) and roughly 40 million kg of burley.

But even as the excessive rainfall slashed yields, it worked wonders for leaf quality. Brazil’s 2024 crop boasts good color, uniformity and smoking properties, according to buyers. High oil levels give this year’s leaf a better visual appearance than in 2023. What in the previous year was predominantly light orange to orange is this year orange to deep orange, observed Kohltrade in a recent crop report. “It’s perfect, in my opinion,” said Kohltrade Account Executive Simone Velasques.

And it’s not just looks that set this crop apart; the tobacco smokes exceptionally well, according to Eduardo Renner, president and CEO of CTA-Continental. “That’s also the feedback we are getting from customers,” he said. On the flipside, the rain also suppressed nicotine levels in this year’s tobacco. According to Jay Barker of YTL, the excess rainfall has resulted in below-average chemistries across the board. Because the wet season followed three consecutive dry ones, the gap in nicotine levels between the current crop and the previous one is greater than normal, which may challenge some customers in creating their desired blends.

Chasing Tobacco

The combination of low volume and high quality, along with a persisting post-Covid-19 tobacco shortage at the global level, sparked a scramble among tobacco companies in Brazil to secure their requirements. As a producer of sought-after flavor tobacco, Brazil has only two true competitors on the world market—Zimbabwe and the United States. Zimbabwe, where El Nino brought drought instead of rain, is also looking at a smaller crop this year (albeit from a record volume in 2023), according to that country’s Tobacco Industry and Marketing Board. United States FCV production, meanwhile, has been stable for three years at just below 140 million kg, TMA figures suggest.

The shortage has been aggravated by the fact that last year some customers didn’t buy everything they needed because they were expecting cheaper tobacco this year. Coming out of the pandemic, many customers adopted a wait-and-see approach, carefully managing their stocks to avoid buying at high prices. Now, with inventories running out, those who didn’t buy last year had to buy this year.

According to local traders, Brazil’s leading tobacco buyers alone needed more leaf than the entire volume that was expected to come to the country’s market in 2024. Throughout the season, the vertically integrated companies—BAT, Philip Morris International, Japan Tobacco International and China Tobacco—were buying far above list prices, paying top rates for all grades and leaving independent traders with no choice but to follow their lead.

The result has been an unprecedented escalation of leaf prices and an acceleration of deliveries. In mid-March, farmers were receiving up to $5.50 per kilogram of green tobacco, according to Kohltrade. For processed leaf, customers were paying up to $9.50 for grades that cost perhaps $5 only three years ago. “Prices are up, up, up,” observed Afubra President Marcilio Drescher.

Daison A. Kohl, who grows 2.7 hectares of tobacco in Vale do Sol, said he has never in his time on the farm witnessed such high prices and such fierce competition. Unlike many of his neighbors, Kohl contracts only with one buyer. Yet throughout the buying season, his phone rang nearly daily with representatives from other companies asking him to sell his leaf to them instead.

Kohl had to disappoint them all. “It doesn’t matter how much they offer; the tobacco is just not there,” he said. Merchants have been telling their customers a similar story. Whereas in a more typical year, they may exaggerate and say, “there is no tobacco” as a price negotiation tactic, this season it is simply a statement of fact.

The scramble for tobacco has also greatly accelerated the purchasing process, leaving some receiving stations struggling to keep up with the influx of leaf. At the time of Tobacco Reporter’s visit, leaf merchants were expecting farmers to run out of tobacco by the end of April—two months earlier than in 2023. “Customers who come late to Brazil may not find what they are looking for,” warned Velasques.

Labor Scarcity

For the growers, the 2024 marketing season has been a mixed bag. Even with record per-kilo prices, the additional income may not make up for the reduced weight that they are bringing to market, according to Afubra. Kohl, who suffered a 26 percent drop in yield from last year, said that as long as the companies continue paying above list prices, his operation will remain profitable this year. “But if they resort to paying list prices, it will be a problem,” he said.

While the cost of inputs such as fertilizer have been coming down from their Covid-19-induced and Ukraine war-induced spikes, a long-running shortage of labor has worsened in recent years, impacting both farmers and tobacco factories. But whereas tobacco buyers can mechanize operations such as rack loading and stripping, farmers have fewer options. With an average property size of 10.5 ha and an average area devoted to tobacco of only 3.29 ha, according to Afubra, the typical tobacco farm in southern Brazil is simply too small to justify the investment in equipment. What’s more, many of the tobacco growing activities lend themselves poorly to mechanization. There are no machines for delicate tasks such as sucker control and topping, for example.

Meanwhile, aware of their growing scarcity, farmhands have started driving harder bargains. In Vale do Sol, they have organized themselves in collectives, forcing farmers to negotiate with groups instead of individuals, according to Kohl. To guarantee a group’s labor throughout the growing season, he must pay a premium on top of the already inflated salaries.

Determined to control their cost of production, Kohl and his wife, Solange, carry out many of the tobacco farm activities, including land preparation, themselves. They hire labor for the first, second and third reapings, when the leaves are still thin and easily damaged and speed is of the essence. “If we don’t harvest quickly during that time, we will lose quality,” said Kohl. From the fourth reaping onward, the tobacco is thicker and less fragile, allowing the Kohls to harvest by themselves and save money on labor.

Their workload has been lightened a bit by a recent switch from bundles to loose leaf. In the past, growers in Brazil would classify their tobacco according to quality and color and then tie the leaf into bundles—a laborious process that could take up to two months. As demand increased, some buyers told farmers to skip this step and deliver the tobacco in loose form instead. The practice spread rapidly and has now been adopted by all merchants. After drying the tobacco, the farmer can take his tobacco directly from the barn to the bale and put it on a truck, not only saving time and labor but also greatly accelerating the speed of delivery.

While some buyers at first worried about how the new practice would impact processing, those concerns turned out to be manageable. “Loose leaf is not necessarily the best way to receive tobacco in terms of the feeding table and the presentation of each grade, but we quickly realized it’s possible,” said Streck. According to Renner, the process remains the same. “You can still tip and thresh the leaf because it is straight laid.”

Farmer Succession

The Kohls are happy with the change to loose leaf, as it allows them to focus on other farm activities. As they work their fields, they are occasionally joined by their oldest son of 34, who has no interest in farming but feels a duty to help on some evenings after he’s done with his day job. Their middle son (25) by contrast “does not even want to see the tobacco,” according to Kohl, while their youngest (8) is too little to work on the farm. (Brazilian law requires tobacco workers to be at least 18 years of age, and following intense industry-led awareness campaigns, the country’s sector today is considered a role model in in eradicating child labor.)

The Kohls’ family dynamics hint at another challenge facing Brazil’s tobacco business: farmer succession. Like their counterparts around the world, many rural youngsters in Brazil aspire to work in the city, which has led to an exodus of skills and talent from the countryside. “Keiner will die Finger mehr dreckig machen”—nobody wants to soil their fingers anymore—observes Solange, who, like many people in southern Brazil, is more conversant in German than English as a foreign language.

A 2023 survey conducted by the Federal University of Rio Grande do Sul at the request of the Interstate Tobacco Industry Union (SindiTabaco), revealed that with an average monthly income of BRL11,755.30 ($2,234.75), tobacco farming families in southern Brazil are relatively well off, earning considerably more than the average Brazilian family. The Kohls, for example, live in a spacious, well-built home equipped with plenty of conveniences and some luxuries, including a small swimming pool. Within agriculture, too, the golden leaf continues to generate the best returns, according to industry sources, contradicting the narrative pushed by certain nongovernmental organizations that tobacco leaves growers in poverty.

But while the earnings from tobacco farming exceed those of other crops, the golden leaf is also more demanding. Unlike some other agricultural products, the farmer cannot just plant it and watch it grow. A good tobacco farmer, notes Kohl, must constantly keep an eye on the plants. “The weather can change things very quickly,” he said. “If rain comes, it puts the leaves on the plants and—boom—they become big overnight. And if you don’t go in and take the flowers off and the wind comes, it can topple the plants.”

With no one lined up to take over the farm, the Kohls’ tobacco volumes will disappear from Afubra’s production statistics after they retire. “We have another 10 years, and then we’ll be gone,” said Kohl. Unfortunately for tobacco buyers, their situation is not exceptional. According to the University of Rio Grande do Sul study, 27 percent of the growers in southern Brazil have no succession plan.

Acutely aware of the demographic drain, the tobacco industry has been looking for ways to keep young adults in the countryside. Originally set up by SindiTabaco and its associate companies to help combat child labor in rural Brazil, the Growing Up Right Institute (also see “Alternatives for Adolescents,” Tobacco Reporter, April 2021) now also runs programs educating young people on the verge of adulthood about the opportunities on the farm. By teaching youngsters how to optimize farm operations through technology and professional management, the institute hopes to convince them that they can live good lives in the countryside.

According to program manager Nadia Fengler Solf, the initiative has had some success. Upon graduation from the program, she said, many students have a completely new perspective on the possibilities in the countryside. Some decide to develop their family properties, investing in new technologies and diversifying their business, while others elect to pursue degrees in agriculture.

COP Fallout

But even as the industry is working to keep farmers interested in tobacco, others are campaigning to steer them away. At COP10 in Panama, delegates vowed to step up action on Articles 17 and 18 of the treaty, which call for the promotion of economic alternatives for tobacco workers and the protection of the environment and health of tobacco workers, respectively. According to a speaker at this year’s Americas Regional meeting of International Tobacco Growers’ Association in Santa Cruz do Sol, the Panama COP could be the first to have a direct impact on the farm.

SindiTabaco President Iro Schunke dismisses the talk about alternative crops in Southern Brazil as unrealistic. “If we had another crop that generates the same income, farmers would have switched long ago on their own accord,” he said. Part of the problem, he explains, is the small average size of farm properties. “To replace the money from one hectare of tobacco, you need to grow 7 hectares of soybeans or 10 hectares of maize.” The pressure for diversification, meanwhile, is unnecessary, according to Schunke. “Tobacco farmers in Brazil are diversified already,” he said. While generating between 60 percent and 70 percent of the average grower’s income, tobacco claims only 20 percent of their property, according to SindiTabaco. Part of the money earned from tobacco is used to plant supplemental crops.

“If we had another crop that generates the same Income, farmers would have swItched long ago on theIr own accord.”
Iro Schunke, president, SindiTabaco

Brazil was one of the most vocal proponents of stricter tobacco controls at COP10, a position that Schunke considers odd, given that leaf tobacco accounts for 11 percent of Rio Grande do Sul’s exports, employs more than half a million farmworkers and earned Brazil an average of more than $2 billion annually through exports over the past 10 years (see chart). Schunke attributes the government’s tough stand to pressure from nongovernmental organizations and the exclusion of tobacco stakeholders from health policy debates along with an ideological aversion to capitalism.

Some suspect the government’s position is driven partially by ignorance, with bureaucrats in faraway Brasilia unaware of how much rural communities in the south of the country depend on the golden leaf. “Although hostility against tobacco from agencies all over the globe is the new status quo and the path of least resistance, the fact is, the economic impact to the communities where tobacco is prevalent is very significant,” says Barker.

Santa Cruz do Sul Mayor Helena Hermany believes that Brazil’s national health surveillance agency, Anvisa, grossly underestimates and misrepresents the industry’s economic significance. More than 50 percent of the city’s revenue comes from tobacco, she told participants in the ITGA Americas meeting. “If tobacco does well, we all do well,” she said.

If tobacco does well, we all do well.
Helena Hermany, mayor of Santa Cruz do Sul, Rio Grande do Sul, Brazil

It terms of sustainability, the tobacco industry is also performing much better than it is given credit for. “We are doing quite well in terms of soil protection, reforestation and the prevention of child labor,” said Drescher. For example, Brazilian farmers are self-sufficient in curing energy, sourcing wood from dedicated plantations rather than indigenous trees.

According to Renner, sustainability is already an integrated part of everything the tobacco industry does. “Whatever we supply must cover these three capital letters,” he said, referring to the environmental, social and governance considerations that the abbreviation stands for. “What we do for our people, our clients, in our operations and in the communities we work with … our suppliers need to do for us.”

As they prepare for next season in the wake of this year’s short crop, industry stakeholders are keen to avoid a wild swing in the other direction. Emboldened by the high prices and keen to recover their lost volumes, many growers are likely to increase their plantings for the 2024–2025 season. Kohl, by contrast, is cautious, worrying that a surplus next year will depress prices, and he plans to plant the same hectarage as last year.

Others predict that the era of cheap Brazilian tobacco is over, not only due to demand-and-supply factors but also as a result of the considerable investments the local industry has made in sustainability. These investments should serve Brazil well as it moves into the new era, giving the country a competitive advantage against origins with less robust practices. At the same time, leaf merchants insist that the effort should be supported throughout the supply chain. ESG initiatives, after all, come at a cost that should be reflected in leaf prices. “It must be sustainable for all parties,” insisted Renner.

Taco Tuinstra is Tobacco Reporter’s editorial director.Based in Raleigh, North Carolina, USA, he coordinates the work of staff writers and contributors.On his watch, Tobacco Reporter has won several awards for editorial excellence.Since joining the magazine in 1997, Taco has visited more than 75 countries to meet industry representatives in their markets and to report tobacco news firsthand.

May 1, 2024

AOI Brazil Invests in Seed Production

Image: AOI
Alliance One International has opened a seed industrialization unit at its Global Research, Development and Deployment Center in Passo do Sobrado, Brazil.
Alliance One is a major supplier in Brazil’s tobacco seed market, with tobacco grown from the company’s varieties comprising approximately 40 percent of the tobacco produced in the country. According to AOI, the new seed industrialization unit positions the company for global growth as a leader in tobacco crop solutions with the ability to provide customers and farmers with best-in-class genetics.
“Our new unit provides us with greater quality control of our seed products and makes it possible for all activities to be governed by our internal integrated quality management system,” said Helio Moura, vice president of global agronomy at Alliance One, in a statement. “Improved quality control opens doors to sell our seed in new markets at a faster speed, increases customer and farmer satisfaction, and drives efficiencies within our business.”
According to AOI, the new equipment furthers the company’s efforts to combine cutting-edge technology with advanced agricultural practices to produce high-quality seeds for tobacco production. The machinery is designed to handle small seeds such as tobacco, a rare specification in various markets, and perform a range of essential seed processing functions including threshing, grading, upgrading, pelleting, drying and seed finishing. These capabilities help improve seed germination, stimulate healthy, consistent crop development and increase yield—key elements to improving farmer livelihoods and meeting customer volume requirements and specifications.
The unit has an annual processing capacity of nearly 2 metric tons and the ability to pelletize more than 200,000 cans of seed for sale each year. “The company’s global research, development and deployment center plays a fundamental role in promoting quality, productivity and sustainability in tobacco,” said Moura. “Our agronomic input packages are tested at the center before going to the field, positioning our Company to deliver extremely competitive genetics to the farmer.”
Alliance One says its genetics promote higher quality, yield and disease resistance in tobacco crops and are proven to reduce the amount of crop inputs, such as crop protection agents, fertilizer and nutrients necessary for production. This reduction results in a lower cost of production for the farmer while driving forward a more sustainable industry.
“Our strategy has allowed us to develop global solutions and approaches, respecting the culture and speed of each market, aiming to strengthen the future of and bring efficiency to our supply chain,” said Moura.
AOI says it remains committed to the innovation of sustainable agriculture practices and driving advancements in the agriculture sector that will support farmers and customers across the globe.
January 19, 2024
Difficult Dynamics

Photo: Taco Tuinstra
The oriental leaf business struggles with adverse weather conditions and farmer attrition.
By Stefanie Rossel
“Complex” is probably the word that best describes the prevailing situation for classical oriental tobacco. In 2023, the sector again struggled with adverse weather conditions and farmer retention.
“A shared challenge faced by all countries in the current season is the impact of adverse weather conditions,” comments Stelios Grigoriadis, regional director of Europe at Alliance One International (AOI).
“The crop encountered difficulties early on with an extended rainy season, reducing transplanted acreage. Subsequently, an exceptionally dry and hot summer exacerbated the situation, resulting in volume losses for the industry ranging from 10 percent to 30 percent in specific countries. These weather-related challenges have been a common denominator in the diminished crop volumes across the region.”
The current crop volumes in the four principal cultivating countries for classical oriental tobacco, comprised of Turkiye, Greece, Bulgaria and North Macedonia, will likely to be down, says Grigoriadis, marking a departure from the trends observed in the preceding two years to three years. “This decline is attributed to different factors influencing each country’s production landscape.”
AOI emphasizes that its production estimates provide only a snapshot of the current expectations, adding that external variables may play a significant role in shaping the results. The company expects market leader Turkiye to produce 50,400 tons this season compared with 51,320 tons in 2022 and more than 55,000 tons under typical weather conditions.
AOI anticipates 37,500 tons of the Izmir variety, basically flat from the 37,450 tons recorded in the previous year. It projects the Samsun crop to decline from 3,575 tons in 2022 to 3,000 tons in 2023.
Basma dropped from 1,645 tons in the 2022 crop to 1,400 tons in the current season while Turkish Prilep increased from 850 tons in 2022 to 2,250 tons in 2023. East Izmir declined from 7,800 tons in 2022 to 6,250 tons in the current season.
Weather conditions played a crucial role in determining the quality of the different varieties. Izmir experienced a negative impact on quality compared to previous years, primarily due to the hot and dry summer conditions. “This reflects a deviation from the standards observed in earlier crops,” says Grigoriadis.
By contrast, the quality of Samsun and Basma was positively impacted. “The warm and favorable weather conditions during the curing period have contributed to an improvement in the quality of these varieties,” observes Grigoriadis. “This positive influence underscores the importance of climate factors during critical stages of cultivation.”
The East Izmir variety remained stable in terms of quality, according to Grigoriadis.

Photo: Prestige Leaf
Lack of Labor
Projections for the 2023 classical oriental crop in Greece vary. Dora Gleoudis, managing director of Greek leaf tobacco exporter Nikos Gleoudis Kavex, expects it to amount to 6,500 tons, comprising 4,300 tons of Basma and 2,200 tons of Katerini. This compares to a total crop of 8,000 tons in the 2022 season. “The quantity reduction is due to labor shortages,” says Gleoudis. “However, the crop quality in all areas is higher compared to last year’s, favored by weather conditions.”
Nikos Tzoumas, managing director of Missirian, anticipates a crop of 5,700 tons divided between 3,700 tons of Basma and 2,000 tons of Katerini. “The Greek oriental crop decreased overall by almost 30 percent,” he says. “The reasons for this decrease, in sequence of importance, are abandonment of cultivation, absence of external workforce and low field yields due to dry weather.”
The Katerini crop volume dropped by 35 percent, according to Tzoumas. “Eighty percent of this decrease was due to less cultivated land—that is, farmers who abandoned cultivation and farmers who decreased their cultivated land due to absence of workers—and 20 percent due [to] lower leaf yield following dry weather conditions,” he says. “Basma production decreased by 25 percent, caused mainly by farmers who abandoned cultivation.”
Tzoumas agrees that the quality of this year’s crop is very good. “Transplanting was accomplished under rainy conditions,” he says. “Later in the season, the extreme heat wave during July and the total absence of rainfall for four months stressed the plants and resulted in small, ripe and bodied leaves.”
Bulgaria also experienced a significant reduction in volume. According to AOI, the country is expected to harvest approximately 3,200 tons of classical oriental tobacco in 2023. Like Greece, Bulgaria has struggled with farmer attrition and unfavorable weather conditions. “The attrition of farmers raises concerns about the sustainability and resilience of the tobacco industry in these countries,” says Grigoriadis.

Photo: AOI
Up and Coming
North Macedonia appears to be a rising star among oriental-producing countries. Although its volume is projected to reach 16,000 tons in 2023, down from 21,000 tons in 2022, its farmer base remains committed. The number of growers cultivating Prilep has remained relatively stable in recent years. Yaka volumes, meanwhile, have declined to 150 tons this season from 248 tons in 2022.
Hot and arid conditions during summer in Prilep, the center of North Macedonian tobacco growing, significantly reduced the crop quantity. However, the abundant sunshine also positively impacted the quality of the Prilep crop, according to Grigoriadis. “Particularly in the middle and upper harvests, the overall quality of this crop can be characterized as above average.”
Rising Production Costs
In addition to the already mentioned challenges, oriental tobacco growers have had to cope with the still-simmering Covid-19 pandemic, the Russia-Ukraine conflict and the escalation of hostilities in the Middle East. According to Gleoudis, the war in Ukraine has dramatically increased the prices of growers’ inputs as well as labor costs. On top of that, rising prices for other crops, such as corn or cotton, have prompted some growers to abandon the golden leaf. Tzoumas notes that the war in Ukraine and the subsequent economic sanctions against Russia have affected exports to Russian manufacturers.
Tobacco farmers in North Macedonia, meanwhile, have been struggling with continuously rising labor expenses, according to Grigoriadis. “This is a result of both the government-mandated annual increase in the minimum wage and a labor shortage stemming from increased population migration,” he explains.
Turkiye, too, copes with the fallout from these crises. High inflation coupled with uncertainties in the pricing of crop inputs such as fuel, fertilizer and chemicals has created an environment of uncertainty. “The uncertain pricing of other crops has led some farmers to switch crops in the short term, disrupting planning and creating inefficiencies in the production of alternative crops,” says Grigoriadis.
“This, in turn, results in fluctuations in farmer income, further increasing the challenges faced by those in the oriental sector. The uncertain and volatile conditions in the wake of these crises not only impact the financial aspects for farmers but also disrupt long-term planning. The uncertainty in input pricing and the unpredictability of crop prices create challenges in decision-making, affecting the overall efficiency of tobacco production.”

Photo courtesy of Nikos Tzoumas
Still in Undersupply
While there have been shortages in all tobacco varieties, buyers of classical oriental tobacco, in particular, have been suffering from undersupply over the past two years. A return to balance in supply and demand is possible but depends on several factors, according to Grigoriadis.
The challenges posed by weather-related uncertainties may require growers to adjust their agricultural practices and embrace new technologies along with risk mitigation strategies. “Collaborative efforts among stakeholders, including farmers, state institutions and industry players may also contribute to a more resilient and sustainable supply chain for classical oriental varieties,” says Grigoriadis.
“Supply and demand for oriental tobaccos are and will remain unbalanced,” predicts Gleoudis. “Regretfully, options of mechanizing the oriental tobacco crop have not proven successful.” She is referring to the HMO oriental tobacco harvesting machine developed by VIT and Philip Morris International that was trialed in Greece in the summer of 2020 to reduce farmers’ reliance on manual labor.
“The opportunity to make the oriental tobacco cultivation a sustainable and mechanized crop was lost five years ago when the buyers did not embrace the HMO and the tobacco which was produced as such,” says Tzoumas. “Ten years of hard work by many individuals, five versions of improved HMO models, a new pure Basma seed with increased field yields registered in Greece and many young farmers with enthusiasm were all gone! At that time, even the farmers were ready to invest as they had understood sustainability as a tool for security and balance for their product and their life.”
His forecast for the Greek oriental crop in 2024 is therefore pessimistic. “A further decrease in production is projected to happen in the 2024 crop,” says Tzoumas. “Farmers will keep on shifting from manual to mechanized crops, missing the work force needed for oriental tobacco, and to food crops, with the latter being in higher demand.” Aggravating the situation, the European Union’s Common Agricultural Policy 2023–2027 significantly reduced the funds allocated to tobacco growers by adopting a flat rate per hectare, which is not in the favor of small holdings common in oriental tobacco farming.
Gleoudis expects Greek and Bulgarian oriental production to remain stable in 2024. “Depending on weather conditions, North Macedonia could increase its production back to 22,000 tons.”
Grigoriadis shares this prognosis for North Macedonia. “This optimistic estimate emphasizes the significance of weather conditions in determining the success of the crop,” he says. “It also indicates a potential for North Macedonia to maximize its production capacity, provided that external factors align favorably. However, it is essential to remain attentive to potential challenges and fluctuations in supply/demand dynamics that may influence the actual outcome.”
Given favorable weather conditions, Turkiye’s 2024 oriental crop could increase by between 5 percent and 10 percent, according to Grigoriadis. “The competitiveness of oriental tobacco against other rival crops and the careful management of production costs are key considerations in shaping the final outcome.”
Stefanie Rossel is Tobacco Reporter’s editorial contributor. An experienced trade journalist, she combines sharp reporting skills with in-depth knowledge of the tobacco and vapor industries. Prior to joining Tobacco Reporter, Stefanie was editor-in-chief at Tobacco Journal International, where she worked for a decade. Fluent in English, German and French, Stefanie covers tobacco news around the world. She is based in Germany.

January 2, 2024
Alliance One Malawi Spends Millions on CSR

Photo: Taco Tuinstra
Alliance One Malawi has spent roughly MKW442 million ($384,721) on its corporate social responsibility programs over the last two years, according to The Nyasa Times.
The company renovated and constructed new classrooms for more than 22 primary schools over the last two years, according to Fran Malila, corporate affairs manager.
“As a corporate responsibility entity, Alliance One thought it wise to renovate as well as construct new classroom blocks in these 22 primary schools so that pupils who are future leaders of this country should learn in [a] better environment,” said Malila. “In the process, we are also fighting child labor as our aim is to see every kid to go to school and not be used as a source of labor in tobacco fields.”
The renovated schools have led to higher student enrollment and retention rates.
According to Malila, the company also constructed a postnatal ward and donated various medical equipment to Mzuzu Central Hospital’s pediatric ward.
October 23, 2023
Pyxus Reorganizes

Photo: Pyxus
Pyxus International has announced a new, streamlined organizational structure designed to increase operational efficiencies, drive organizational effectiveness and create stakeholder value.
The company will split the role and responsibilities of the Alliance One president, creating two new leadership positions—executive vice president, chief operating officer (COO) and executive vice president, business strategy & sales.
In addition, it will redesign of the company’s current business services function and rebrand the company’s current communications, sustainability and external affairs function, positioning it as a standalone corporate affairs department
Alliance One’s president, Alex Strohschoen, has departed the company to pursue new opportunities. Additionally, the organizational structure changes align with Herbert Weatherford, Alliance One senior vice president, business relationship manager’s intent to retire in March 2024 after 34 years of service.
“In line with one of Pyxus’ key themes for fiscal year 2024—simplification—our updated organizational structure connects our core business functions with our strategic priorities to drive accountability and operational results while reducing unnecessary or burdensome complexities,” said Pyxus President and CEO Pieter Sikkel. “We have assembled a strong, diverse leadership team and I am confident this new structure further positions Pyxus as a future-facing, agile business as we continue prioritization of growth and long-term success.”

In line with one of Pyxus’ key themes for fiscal year 2024—simplification—our updated organizational structure connects our core business functions with our strategic priorities to drive accountability and operational results while reducing unnecessary or burdensome complexities.
Pieter Sikkel, president and CEO, Pyxus
Pyxus has appointed Scott Burmeister to the newly created position of executive vice president, COO. Burmeister has served the company in several capacities since joining in 1996, most recently leading the business’ Europe, Middle East and Africa region. As COO, he will focus on the company’s global operations, quality and output, with oversight of the business’ regional director positions, and the global agronomy department and value-added agricultural products division.
Dustin Styons has been named Pyxus’ executive vice president, business strategy and sales, responsible for business-to-business strategy, business relationship management, business development and the company’s e-liquids division. Styons joined the company in 2005, most recently serving as vice president, corporate finance and business development.
Tracy Purvis, who has led the Pyxus’ global business services function since 2018, has been tasked with its redesign under the new title of executive vice president, global business & information services. Purvis, who joined the company in 1990, will leverage Pyxus’ IT assets to drive cost competitiveness, efficiencies and effectiveness with a focus on process automation and simplification, data analytics, validation and visualization, and productivity collaboration.
To align with the business’ strategic focus area of environmental, social and governance (ESG), as well as the growing importance of addressing all stakeholders equally to mitigate risk, enhance brand value and ensure consistent, transparent messaging, Miranda Kinney has been promoted to senior vice president, global communications & sustainability. She will lead the company’s newly formed global corporate affairs department and will remain responsible for internal and external communications, crisis management, sustainability and ESG, and external and government affairs.
All four positions will report to Pyxus’ president and CEO.
September 14, 2023
A Gamble on Goobers

PAM Managing Director Ronald Ngwira (left) examines fuel pellets created with leftover shells from the company’s groundnut operations. | Photo: Taco Tuinstra
Pyxus has great expectations of its Malawi groundnut business
Like many of their customers, tobacco merchants in Malawi have been exploring supplemental lines of business—not only to ensure their future as cigarette consumption stagnates but also to help their contracted farmers develop supplemental sources of income.
Pyxus Agriculture Malawi’s (PAM) contracted tobacco farmers often cultivate nontobacco crops, including groundnuts, maize and sunflowers. Measured by weight, its growers already produce four times more food than tobacco. As part of its efforts to improve farmer livelihoods and the communities in which they live, Pyxus has been working to find markets for some of these crops.
The company has high expectations, especially for groundnuts, which are nutritious sources of protein, vitamins and dietary fiber. Among other health benefits, groundnuts are credited with preventing heart diseases, lowering bad cholesterol and improving fertility. Common products made from groundnuts include cooking oil, herbal supplements, butter and snack items. Groundnuts are also used as a source for animal fodder. There are three categories of groundnuts: the Hausa groundnut, the Bambara groundnut and the peanut.
Driven by consumers’ growing appetite for protein-rich and plant-based foods, global demand for groundnuts is increasing by 4 percent per year. Market Research Future projects the value of global peanut sales alone to reach $107.4 billion by 2030. Malawi has grown groundnuts for decades. “In the 1980s, Malawi used to be a big exporter to Europe,” says PAM Managing Director Ronald Ngwira. Currently, however, Africa is a net importer of groundnuts; global supply is dominated by Argentina, India and the United States. Malawi produces 447,421 metric tons of groundnuts—less than 1 percent of global cultivation.
A Good Match for Malawi
In addition to enjoying strong global demand, groundnuts are suited to Malawi’s conditions. Due to the country’s landlocked location, agricultural exports must travel long distances to ports in either South Africa or Mozambique. As a semi-perishable product, groundnuts are able to tolerate such journeys without requiring expensive cold storage.
What’s more, groundnut plants release nitrogen as they decompose, improving soil fertility and allowing farmers to reduce their fertilizer bill. Soil health has been a major concern in Malawi, where farmers struggle with high levels of acidity and insufficient levels of organic matter due in part to deforestation and less-than-optimal agricultural practices.
Another benefit: Leftover shells from Pyxus groundnut operations can be converted into fuel pellets and green charcoal, reducing the need to cut trees for firewood and potentially saving thousands of hectares of forest. This is a big deal in Malawi, where few people have access to electricity and the majority of the country’s rapidly growing population burns wood as fuel for cooking and energy. Wood is also used by farmers to build barns and cure tobacco. Industry typically relies on coal to fuel its activities. According to Ngwira, the use of groundnut shell-based fuel has already allowed Pyxus to reduce AOTM’s factory reliance on coal by 40 percent.
One challenge that has been holding back Malawi groundnut production is the quality of its plant varieties, which has constrained quality and productivity. To unlock the potential of groundnuts for Malawi, PAM has been researching better cultivars. Over the past few years, the company examined 1,000 strains from around the world. Looking for varieties that are high in protein, climate-change resilient and resistant to disease, PAM selected four types and presented them to the ministry of agriculture for approval. The company then invested in irrigation, mechanization and multiplication of the improved varieties to boost farmers’ yields and incomes.
Boosting Volumes and Quality
Tapping into its large network of tobacco field technicians, Pyxus also started offering extension services to groundnut farmers. “We have more than 150 qualified extension officers training farmers on a daily basis to assist farmers achieve better yields and quality while also ensuring track-and-trace capabilities to export into international markets,” says Ngwira. At 1 metric ton per hectare, average groundnut yields have traditionally been low in Malawi. With better cultivars, inputs and agricultural practices, however, it should be possible to increase those yields to 3 metric tons per hectare, according to PAM. Ngwira says the company will follow the same journey it took when implementing the integrated production system in tobacco, where years of farmer training resulted in substantially improved productivity and loan recovery rates.
PAM’s investments in groundnuts are paying off already. In 2021, Malawi’s government set the minimum selling price of groundnuts at MKW330 ($0.32) per kilogram. Owing to the quality produced by its contracted farmers, Pyxus was able to offer a minimum price of MKW440 per kilogram, according to Ngwira.
PAM is also tackling the problem of aflatoxins, poisonous carcinogens produced by certain molds that can impact agricultural crops. Historically, Malawi groundnuts have suffered from comparatively high levels of aflatoxins, but with better agricultural practices, such as quick drying to prevent the formation of fungi, it is possible to reduce contamination to below the tolerances prescribed by export markets.
In March 2022, PAM inaugurated a $3 million processing factory in Lilongwe’s Kanengo, where it not only cleans, shells and sorts the groundnuts but also turns the leftover shells into fuel pellets. Built in a disused tobacco warehouse, the facility employs more than 100 people and has the capacity to process 50,000 tons of groundnuts per annum. It is the largest groundnut shelling plant on the African continent outside of South Africa.
Addressing Malawi President Lazarus Chakwera and other dignitaries attending the opening ceremony, Ngwira noted that factory was key to unlocking Malawi’s potential for agricultural industrialization—which is in line with the government’s commitment to promote exports through value addition for agricultural crops.
Ngwira is excited about the prospects for Malawi groundnuts. In addition to growing demand from major markets such as China and India, there is also a huge appetite for the product regionally. “Currently, most Malawi groundnuts are exported to the Lake Victoria region,” he says. Already home to more than half a billion people, the area’s population is projected to grow significantly. “Malawi can help supply the protein to feed those people,” says Ngwira.
To cater to the anticipated demand, PAM aims to rapidly expand its contacted farmer base from about 7,000 smallholders at the time of the factory opening to about 30,000 in the future. In the process, it will not only create additional sources of incomes for its contracted farmers but also provide Malawi with a welcome supplement to tobacco as a source of much-needed foreign exchange.—T.T.
Taco Tuinstra is Tobacco Reporter’s editorial director.Based in Raleigh, North Carolina, USA, he coordinates the work of staff writers and contributors.On his watch, Tobacco Reporter has won several awards for editorial excellence.Since joining the magazine in 1997, Taco has visited more than 75 countries to meet industry representatives in their markets and to report tobacco news firsthand.

June 1, 2023
The Trade’s Perceptive
The Trade’s Perspective: Leaf Merchants Urge Sustainable Growth
By Taco Tuinstra
Stakeholders in Zimbabwe’s tobacco business have generally been receptive to the Tobacco Value Chain Transformation Plan (TVCTP), which among other things aims to boost leaf production and move up the value chain (see interview with Minister of Agriculture Anxious Masuka). “The plan has some sound fundamentals,” says Mark Mason, managing director of Zimbabwe Leaf Tobacco Co., a subsidiary of Universal. “It sensibly talks about vertical growth—boosting tobacco production by improving yields and cutting losses rather than expanding hectarage or increasing the number of farmers. Those are admirable objectives.”
At the same time, the industry is counseling caution and realistic expectations. In recent years, some entrepreneurs have moved beyond Zimbabwe’s mainstay of flue-cured Virginia (FCV) production. Several companies, including Mosi Oa Tunya Cigars (see “The Smoke that Thunders,” Tobacco Reporter, June 2021), are now manufacturing cigars with locally grown tobacco. Cavendish Lloyd is experimenting with low-nicotine FCV for shisha products (see “Great Expectations,” Tobacco Reporter, May 2022). There are also several companies producing cigarettes for the local market. In October 2022, Cut Rag Processors announced it would build an $80 million cigarette factory in Harare. Iranian Tobacco Co. has expressed interest as well, though the discussions are only at an exploratory stage.

The plan sensibly talks about vertical growth—boosting tobacco production by improving yields and cutting losses rather than expanding hectarage or increasing the number of farmers.
Mark Mason, magaging director, Zimbabwe Leaf Tobacco
But while BAT and some of its smaller competitors have been happy to manufacture limited amounts of cigarettes in Zimbabwe, it’s doubtful that big players such as Philip Morris International and Japan Tobacco International will build factories in Zimbabwe. Serving global markets and headquartered in Western capitals, the multinationals are guided by purely commercial considerations and generally seek to establish their manufacturing operations in countries with smooth roads, reliable power and business-friendly legislation—areas in which Zimbabwe faces strong competition. For these and other reasons, significant local cigarette production for exports by the majors may remain a bit “pie in the sky,” according to one tobacco veteran.
The merchants, in turn, are content with their current position in the value chain, which ends after the transformation of green leaf into unmanufactured tobacco. Currently, there are three tobacco processing factories in Harare—ZLT, Mashonaland Tobacco Co. (MTC) and Tobacco Processors Zimbabwe, which is managed by Northern Tobacco. “We have no investments beyond processing,” says Rob Holmes, executive officer of the Tobacco Leaf Exporters Association of Zimbabwe (TLEAZ), which represents nine leaf dealers with lamina exports of at least 1 million kg each and accounts for 85 percent of the contracted crop. According to Holmes, moving into cigarette manufacturing would put the merchants in direct competition with their customers—a situation they are obviously keen to avoid. “So, monetary-wise, the value addition described in the plan would take place very much after our stage of the chain,” he says.

Merchants warn that, in the current market, Zimbabwe may struggle to sell 300 miillion kg.
(Photos: Taco Tuinstra)
Contracting with tens of thousands of farmers, the merchants are better positioned to help grow the crop. But here, too, they are urging caution. “In the current world market, we would struggle to sell 300 million kg,” says Holmes. “There has been a bit of an increase in the demand for our leaf from China [which purchases 40 percent of Zimbabwean volumes] but not to the extent that you can soak that up.” According to Holmes, the styles that normally go into China are unique to that market and relatively expensive. “Where do you find customers for the excess volumes of those styles?” he asks.
The demand for Zimbabwe’s prized flavor grade tobacco, too, is limited. “International customers require only so much of that style,” says Holmes. “Otherwise, you’d be getting into more filler grade tobaccos, and then you are competing purely on price whilst you’ve got cost-of-production issues.” Supply chain disruptions in the wake of Covid and the war in Ukraine have driven up the cost of inputs such as fertilizer and fuel considerably during the most recent growing season. In addition to such global factors, the Zimbabwean industry has had to cope with local cost pressures this season, such as erratic supplies of electricity and exchange rate rules that force businesses to buy Zimbabwean dollars at official rates while paying significantly higher parallel-market rates for their supplies.

Leaf merchants also want to make sure the targeted volume increases are achieved sustainably.
Leaf merchants also want to make sure the tobacco transformation targeted volume increases are achieved sustainably. “We support the government’s goals, but we need to make sure that they are aligned with customer expectations,” says Alex Tait, managing director of MTC, a subsidiary of Alliance One International. Leading cigarette manufacturers these days expect their tobacco to be produced in line with strict environmental, social and governance (ESG) criteria, which means keeping close track of agricultural practices, labor conditions and environmental impacts, among other issues.
The shift from commercial tobacco production to smallholder cultivation has put tremendous pressure on Zimbabwe’s forests. Before the land reforms at the start of the century, the bulk of Zimbabwe’s crop was produced by about 1,500 commercial farmers, who at their peak in the late 1990s brought some 239 million kg to market. Today, similar volumes are cultivated by nearly 160,000 growers, the vast majority (85 percent) of them smallholder farmers. But whereas the commercial farmers use primarily coal to cure their tobacco, the smallholders rely mostly on wood, creating a voracious demand for timber.
In a presentation to industry stakeholders, including the ministry of agriculture, which drew up the TVCTP, the tobacco industry stressed the importance of meeting ESG objectives, noting that there is no point in growing additional volumes if you cannot sell them. Failing to fulfill ESG requirements, the industry cautioned, will prompt customers to source their leaf elsewhere, leaving the Zimbabwean tobacco grower impoverished.

The trade insists the tobacco value chain transformation plan’s objectives must be consistent with customers’ ESG expectations.
To ensure sustainable growth, tobacco merchants have been developing renewable sources of curing fuel by establishing woodlots and providing farmers with seedlings. Financed by a voluntary leaf dealer contribution, the industry’s Sustainable Afforestation Association has been planting trees since 2013 and is preparing for its first harvest next season. Despite its considerable efforts, the organization still does not have enough renewable wood to cure the current crop, let alone the additional volumes described in the transformation plan.
One of the constraints, according to industry representatives, is access to land close to the tobacco growing areas, which has been mostly in state hands since the land reform program. The prime lands for timber production are in the east of the country, which means added cost for transportation. The government meanwhile collects levies from growers to invest in reforestation, although critics say it is unclear how the money is being invested.
In addition to increasing its supply of sustainable wood, the industry is working to reduce its consumption by helping farmers adopt more efficient curing systems. Innovative designs, such as the rocket barn, allow growers to reduce their wood consumption by up to 50 percent, although costs are a hurdle. At $2,000 per unit, the rocket barn is out of reach for the typical smallholder tobacco grower. The industry is also researching alternative energy sources, such as gas, biomass and briquettes, to curtail deforestation.

The opportunity for Zimbabwe to extract more value from its tobacco industry begins and ends with the ability of the farmer to make a living income.
Meanwhile, the trade is contributing to vertical growth by helping small-scale growers increase their yields. Benefiting from tailored inputs and agronomic extension services, contracted growers have in recent years increased their productivity to an average of 1,700 kg per hectare, a figure the industry hopes to drive up to 2,200 kg per hectare in the future. The national average, which includes independent growers selling at auction, is estimated at only 800 kg per hectare, however, suggesting considerable opportunity for growth.
“In well-managed contract schemes, with the right service levels, the right inputs and the right advice, you can get very good yields,” says Mason. “That needs to roll out throughout the industry. There is definitely opportunity for the newer contractors or the smaller contractors to push through better programs.”
Zimbabwe’s regulator, the Tobacco Industry and Marketing Board, is in the process of implementing a minimum input standards package recommended by the TLEAZ—not only to increase the crop size and benefit the national economy but also to improve the profitability and livelihoods of individual growers. As all stakeholders interviewed for this article acknowledged, the latter will be crucial for the success of the tobacco transformation plan. After all, the opportunity for Zimbabwe to extract more value from its tobacco industry begins and ends with the ability of the farmer to make a living income.
Taco Tuinstra is Tobacco Reporter’s editorial director.Based in Raleigh, North Carolina, USA, he coordinates the work of staff writers and contributors.On his watch, Tobacco Reporter has won several awards for editorial excellence.Since joining the magazine in 1997, Taco has visited more than 75 countries to meet industry representatives in their markets and to report tobacco news firsthand.

May 1, 2023
‘Not Really a Gamble’
Leaf Dealers Look Forward to Receiving a Good Quality Crop
By Taco Tuinstra
While the Tobacco Industry and Marketing Board had yet to release official figures at the time of Tobacco Reporter’s visit to Zimbabwe in early April, traders were expecting farmers to bring 230 million kg to market in the 2023 selling season. That compares with 212 million kg in 2022, which in turn was up from the two years prior.
The increase was due in part to good climate conditions despite the influence of an El Nino. The periodically recurring atmospheric phenomenon typically results in wetter than normal conditions in southern Africa from December to February. But in the event, it wasn’t all that wet.
“The crop was planted on time, and weather patterns were generally favorable,” says Alex Tait, managing director of Mashonaland Tobacco Co., a subsidiary of Alliance One International. As is the case throughout Africa, curing space proved a constraint in Zimbabwe this year. Fast ripening in some areas created some quality challenges toward the tail-end of the season, but nothing pointing to disaster. “It was a normal season,” says Tait.

Traders at the Tobacco Sales Floors in Harare
(Photos and video: Taco Tuinstra)
Zimbabwean volumes have largely recovered from the disruption that followed the government’s land reform program, which shifted the emphasis from commercial growing to small-scale farming during the 2000s and at one point saw the crop plummet to 50 million kg.
The quality produced by smallholders has also been steadily improving, thanks in part to contractors’ extensive support of their growers. This season, overall quality is fair to good, according to Mark Mason, managing director of Zimbabwe Leaf Tobacco Co. (ZLT), which is associated with Universal. “Despite the majority being smallholder, the Zimbabwean tobacco grower is a good farmer,” he says. “If they are serviced well, they produce a very acceptable crop.” In fact, Zimbabwe’s combination of climate, soils and skills means tobacco merchants have come to expect a decent crop, observes Mason. “It’s not really a gamble for us—unless the weather gets very poor,” he says.
Volumes this year were further boosted by good pricing in the 2022 marketing season, which spurred growers’ interest. What’s more, the payment modalities have recently improved, with growers receiving a higher share of their earnings in U.S. dollars as opposed to the less valuable local currency.

Meanwhile, pricing has become quite competitive in the contracting arena. “We have a situation in which more contractors are chasing fewer growers,” says Mason. “If you want to expand in this market, you have to coax a grower to come and join you. You have to argue your case, explain why he should leave X and join Y. The pricing this year will take into account some of those costs.”
Mason expects an increase of about 9 percent in the average per-kilo tobacco price this year, also as a result of the rising cost of production. The price of fertilizer, in particular, spiked in the run-up to this growing season, mostly due to the war in Ukraine, which traditionally supplied many of the raw materials needed for fertilizer production.
At the same time, erratic power supply in Zimbabwe forced commercial growers, who need electricity to operate their curing barns, to use diesel generators, which is more expensive than pulling power from the grid. The shortages were driven by low water levels in Lake Kariba, which houses a major hydroelectric power dam and is crucial to regional energy security, and maintenance at the Hwange power station. Power supply will likely remain a concern going forward, but Tait is cautiously optimistic that recent rains in the catchment areas along with progress at Hwange will help ease the shortages next season.

Despite the anticipated price hikes, exporters expect demand for Zimbabwean leaf to be firm again this season. Tait believes part of that is due to the lingering impact of Covid. “People thought that smoking would go down during the pandemic, but it actually went up,” he says. So the global crop size dipped over the past two years even as cigarette consumption increased. “Of course, there is a question about how long that situation will last,” says Tait. “Zimbabwe’s crop has gone up, as has Brazil’s, so we may see demand level out next year.”
The switch to smallholder growing has radically changed the leaf merchants’ business models. “In the past you used to go and buy what you liked and sell it; now you get a crop throw and you have to figure out how to market that effectively,” says Mason. With contracting accounting for 90 percent of Zimbabwean volumes, dealers these days operate extensive agronomic departments. ZLT alone has well over 100 on-the-ground field staff along with countless cars and motorbikes to service its growers in the countryside. The merchants have also (reluctantly) assumed the role of financiers because the new growers have no collateral with which to secure bank loans. Post land reform, all agricultural land belongs to the state in Zimbabwe.
While dealing directly with thousands of smallholders is a herculean logistical exercise with a huge impact on cost, the shift has also had an unexpected advantage for the tobacco merchants. “In a way, it’s what has allowed us to tick the right boxes because now everything is traceable,” says Tait. “The manner in which ESG [environmental, social and governance] requirements have evolved in recent years is working out for us because we are right down to the farm level to make sure that what the grower is doing is compliant.”
Taco Tuinstra is Tobacco Reporter’s editorial director.Based in Raleigh, North Carolina, USA, he coordinates the work of staff writers and contributors.On his watch, Tobacco Reporter has won several awards for editorial excellence.Since joining the magazine in 1997, Taco has visited more than 75 countries to meet industry representatives in their markets and to report tobacco news firsthand.

May 1, 2023
AOI Partners with University of Lavras
Alliance One International recently partnered with the Federal University of Lavras (UFLA) in Minas Gerais, Brazil, to provide third-party, specialized training to its agronomic employees around the world. The program was established to promote an enhanced employee skillset, which ultimately can benefit AOI’s contracted farmers through improved efficiencies and maximized income potential.
The virtual training program, “From the Seeds to the Cured Leaves,” was conducted by UFLA agronomy professors and took place over the course of six weeks, bringing together AOI tobacco leaf agronomists from 18 countries on five continents.
“Our global agronomy team members have extensive agronomic knowledge about tobacco production, and most have been working with the crop for several years. This professional development program was organized to offer our employees a continuing education opportunity to deepen their knowledge on some of the most technical and scientific aspects of tobacco cultivation,” said Helio Moura, AOI’s global agronomy director, in a statement.
Topics covered in the training ranged from methods to build soil fertility to tobacco ecophysiology—the connection between the plant and its environment—at varying stages of the crop production process.
“Crop production methodologies and best practices are rapidly evolving due to new technologies and research, as well as the impacts stemming from climate change,” said AOI President Alex Strohschoen. “Ensuring our agronomists continue to advance their knowledge base not only encourages employee motivation and engagement, it also aids our global agronomy team in transferring this knowledge to our grower base, helping to strengthen the farmers’ crop quality and yield and delivering value to our stakeholders.”
The Company intends to expand the partnership to provide further training and education opportunities to employees. Additionally, the training sessions “From the Seeds to the Cured Leaves,” have been recorded and will be available to employees to review.
June 29, 2022
AOI-Bayer Partnership Boosts Maize Yields

Photo: AOI
Alliance One International announced the Phase Two results of the partnership of its Brazilian subsidiary with Bayer Crop Science, which was formed with the goal of providing quality maize seeds and agronomic support to smallholder tobacco farmers in Brazil. Following the completion of the 2021 growing season, participating farmers reported a 15 percent average increase in maize yield compared to the 2020 growing season.
“Due to strong farmer interest, we expanded the opportunity to participate in phase two of the program to 100 percent of our Brazilian grower base,” said Helio Moura global agronomy director for AOI, in a statement. “we distributed 5,700 bags of Bayer maize seed to our contracted farmers as well as provided fertilizer and additional agronomic guidance related to maize production. As a result, farmers reported that they experienced improved crop quality and yield, in turn, increasing the farmers’ bottom lines.”
Through the partnership, Alliance One Brazil’s goal is to help its contracted farmers diversify their income by strengthening the quality and yield of a crop that is complementary to tobacco. Farmers that participated in phase two of the program earned an average of $270 more per hectare of maize when compared to the prior crop.

We are very excited about the future of this program and its potential to improve farmer livelihoods not only in Brazil but [also] around the globe.
Alex Strohschoen, president, AOI
“Alliance One Brazil’s contracted farmers produced an additional 5.150 metric tons of maize this past crop year, which is primarily sold for use in animal feed,” said Moura. “Given the threat of a global food crisis, it is increasingly important to help our farmers scale production in order to help offset shortages and high costs.”
In response to the positive results of the program’s second phase, Alliance One Brazil is evaluating the inclusion of additional crops as part of the program and AOI is assessing the potential to expand the program to other countries within its footprint.
“We are very excited about the future of this program and its potential to improve farmer livelihoods not only in Brazil but around the globe,” said Alex Strohschoen, president of AOI. “As we enter the 2022 growing season, we plan to introduce the program to our contracted farmers in Argentina, where a significant portion of our grower base could benefit from improving the quality and yield of their maize crops.”
The improvement of farmer livelihoods is a key priority for AOI. It is committed to maximizing all farmers’ income potential by 2030 through appropriate training in good agricultural practices and the opportunity for crop diversification.
Tobacco Reporter profiled the AOI-Bayer partnership in its June edition (See, “Fruitful Cooperation.”)
June 23, 2022