Tag: Brazil

  • Next Brazilian Crop Could Touch 700 Million Kg

    Next Brazilian Crop Could Touch 700 Million Kg

    Photo: Taco Tuinstra

    The South Brazilian tobacco crop for 2024/2025 will cover 309,982 hectares, marking a 9.08 percent increase from the previous crop, reports Kohltrade, citing the Brazilian tobacco growers’ association, Afubra.

    Paraná state recorded the largest growth at 13.63 percent, with 83,981 hectares planted. Santa Catarina follows with 11.78 percent, with 94,212 hectares planted and in Rio Grande do Sul, 131,789 hectares were planted, reflecting a 4.6 percent rise.

    More than 138,020 families will be involved in in this year’s tobacco crop, 3.57 more than in the previous season.

    “We are emerging from two very profitable harvests for many tobacco growers, leading to high profitability,” said Afubra President Marcílio Drescher. “As a result, more land is being dedicated to tobacco cultivation, with families returning to this crop. However, these developments are concerning. An increase in cultivated area during a period of stable weather could lead to higher production levels, which may negatively impact producers’ income.”

    In terms of production volume, the initial estimate indicates a boost of 37.08 percent, leading to a total production of 696,435 tons in southern Brazil. This includes 630,539 tons of Virginia tobacco (36.52 percent), 54,624 tons of Burley tobacco (44.07 percent), and 11,272 tons of Common tobacco (36.45 percent).

    Representatives from grower organizations and tobacco companies are currently calculating the production costs for the 2024/2025 harvest. Price negotiations are expected to commence once this assessment is completed.

  • Stakeholders Mark Start of Brazilian Tobacco Harvest

    Stakeholders Mark Start of Brazilian Tobacco Harvest

    Photo: SindiTabaco

    Public authorities and representatives of the tobacco supply chain celebrated the Sixth Official Opening Ceremony of the Tobacco Harvest at the Afubra Expoagro Park in Rio Pardo, Rio Grande do Sul, Brazil.

    Afubra President Marcilio Drescher said that, following the recent short crop (see “The Great Scramble”), the sector is anticipating a normal year in terms of quality and productivity. “However, the crop is marketed after harvest and we feel anxious and hopeful in expectation for a good price,” he added.

    SindiTabaco president Valmor Thesing stressed the economic significance of tobacco to the state, and the importance of the integrated tobacco production system. “The opening of the tobacco harvest is a joyful and rejoicing moment that emphasizes the relevance of the tobacco supply chain,” he said in a statement. “It is a century-old crop that generates income and employment, brings in foreign currency and generates taxes.”

    Rio Grande do Sul produces 43 percent of all tobacco in southern Brazil, which in the 2023-2024 growing season harvested 508 million kg. In Rio Grande do Sul alone, tobacco employs almost 70,000 farmers in approximately 200 municipalities.

    Clair Kuhn, secretary of agriculture, livestock, sustainable production and irrigation, highlighted the availability of new financial resources to help growers with irrigation. “Tobacco farmers have never had the chance to get resources from  the government. Now they have that opportunity,” said Kuhn. According to the secretary, 264 projects have already been approved, with an additional 400 undergoing evaluation.

  • Brazil Leaf Exports Could Top $3 Billion: SindiTabaco

    Brazil Leaf Exports Could Top $3 Billion: SindiTabaco

    The value of Brazil’s tobacco exports could surpass $3 billion this season, according to the interstate tobacco industry union SindiTabaco.

    During an Oct. 30 meeting of the Sectoral Chamber of the Tobacco Production Chain, stakeholders shared information on the sector’s performance during the most recent growing season and their expectations for the upcoming crop year.

    According to the Ministry of Development, Industry, Commerce and Services, Brazil shipped 316 million kg of leaf tobacco between January and September, representing a 14 percent reduction compared to the same period in 2023.

    Production volumes were down 16.12 percent, to 508.04 million kg, in 2023–2022 due to excessive rainfall during the growing season. However, the depressed volume boosted the average price by almost 28 percent (see “The Great Scramble,” Tobacco Reporter, May 2024).

    In dollar terms, the value of the shipments to date are up 3.44 percent to $2.03 billion. The largest export destinations for Brazilian tobacco were Belgium, China, the United States, Indonesia and Egypt. In 2023, Brazil exported 512 million kg worth $2.73 billion to 107 countries, with the European Union acquiring the bulk (42 percent) of Brazilian leaf exports.

    SindiTabaco’s newly appointed president, Valmor Thesing, credited Brazil’s integrated system for the sector’s strong performance. “This is a demonstration that our integrated system is fully active, generating income, jobs and revenue,” he said in a statement.

    Some 133,000 families were involved in producing southern Brazil’s 2023–2024 crop—6.62 percent more than during the previous season, according to the Brazilian Tobacco Growers’ Association, Afubra. A similar increase was seen in the planted area, which grew 8.57 percent to 284,184 hectares. “In recent harvests, there has been a more satisfactory average return for producers, which ends up stimulating the expansion of area and producers adopting tobacco cultivation,” explained Afubra President Marcilio Drescher.

    This year’s firm prices may boost next year’s harvest. “We are wrapping up cultivation in almost all areas, and we have noticed an increase in area, encouraged by the recent return,” said Drescher. “By mid-November, we should have some forecast regarding the cultivated area and the number of producer families involved in the activity,” he added.

  • Brazil Mulls Legalizing the Vaping Business

    Brazil Mulls Legalizing the Vaping Business

    Image: Patricia Fragoso

    Brazilian lawmakers are considering a proposal to legalize the vaping business, reports JP.

    E-cigarettes are currently prohibited in Brazil, but they are widely available throughout the nation. To restore order to the market, Senator Soraya Thronicke has proposed legislation that would regulate the production, commercialization, importation and use of vaping devices, as well as establish rules for control, inspection and advertising.

    Among other measures, the proposed legislation would require vaping companies to register their products with the health regulatory agency, the federal revenue service and other agencies. It also prescribes fines ranging from BRL20,000 ($3,678) to BRL10 million for those who sell vapes to buyers under 18 years of age.

    Proponents see regulation as a way to combat the illegal market and protect the population, especially youth. According to the Brazilian Institute of Geography and Statistics, 22.7 percent of Brazilian teenagers have experimented with electronic cigarettes.

    Lauro Anhezini Jr, a board member of the Brazilian tobacco industry association Abifumo, believes the ban is ineffective because it enables suppliers to skirt quality standards. “What we have in Brazil today are illegal products, without any type of oversight, and they pose a risk to consumers’ health, especially teenagers,” he was quoted as saying.

    Anhezini cited the example of the United States, where strict regulations have reduced youth consumption. “In the United States, after the creation of clear rules, the use of electronic cigarettes by teenagers dropped from 27.5 percent in 2018 to 5.9 percent in 2024. This demonstrates how regulation can bring a safer and more controlled scenario for consumers,” he said.

    According to Anhezini, regulation would allow for greater control over product quality, reducing health risks and especially protecting young Brazilians who have easy access to illegal products.

    The discussion also involves economic considerations. The federal revenue service estimates that controlled legalization of e-cigarettes could generate up to BRL700 million in annual revenue.

    However, the federal highway police warns that legalization will not necessarily reduce smuggling, citing the rampant illicit trade in the regulated combustible cigarette market.

    The bill is currently in the Senate’s Economic Affairs Committee and expected to return to the agenda in November.

  • Legislators to Vote on Brazilian Vape Ban

    Legislators to Vote on Brazilian Vape Ban

    Image: VlaDee/pavlofox

    Brazil’s Senate’s Economic Committee was scheduled to vote on bill this week that would legalize e-cigarettes in Brazil, reports Prensa Latina.

    South America’s biggest country currently prohibits the manufacture, import, marketing, distribution, storage, transportation and advertising of vapes.

    The vote on the text has been repeatedly postponed due to a lack of consensus among legislators.

    Despite the ban, which has been in place since 2009, e-cigarettes are reportedly widely available in Brazil.  

  • Brazilian Tobacco Suitable to Ship to China

    Brazilian Tobacco Suitable to Ship to China

    Image: SindiTabaco

    On Aug. 9, the Interstate Tobacco Industry Union (SindiTabaco) hosted a meeting to formalize the closure of the tobacco pre-inspection procedure for the 2023/2024 crop year, one of the requirements of the bilateral trade protocol between Brazil and China. The meeting was held in hybrid format, with the virtual presence of the technicians from the General Administration of Customs China (GACC) and the representative of the Ministry of Agriculture, Livestock and Food Supply (MAPA) and of the National Organization for Brazilian Phytosanitary Protection (ONPF), Pedro Carneiro Abreu.

    Other authorities from Brazil and China attended the event as well.

    “This is a primordial moment for compliance with the protocol. The samples were collected in a very effective manner, and it is with great satisfaction that I inform you that no pests were detected in the collected samples. This once again corroborates the quality of the Brazilian tobacco. China is one of our largest importers of tobacco, and this partnership plays a fundamental role for the continuity of the businesses between the two countries. We are sure that we will continue making strides in this relation,” commented Abreu from MAPA Brasilia.

    “Our participation consists in representing this commitment, which is also shared by minister Carlos Favaro, besides acknowledging this activity as relevant for the entire country. In our understanding, this expresses our responsibility with regard to the Chinese inspection organs,” said Jose Cleber de Souza, superintendent at MAPA RS.

    The MAPA was in charge of collecting the processed tobacco samples and sending them to the Central Analytical Laboratory of the University of Santa Cruz do Sul (UNISC) for laboratory tests that confirm the phytosanitary status of the product prior to shipment. Roque Danieli, tax auditor and head of MAPA’s Plant Health and Inputs Inspection Service in RS, presented details about the pre-inspection activities.

    “During these 23 days in which we worked jointly with the GACC representatives, in virtual format, it was possible to attest to the quality of the 2023/2024 crop and demonstrate that, at field level, the 2024/[20]25 crop is now under cultivation with all the necessary cares in compliance with the requisites set forth on the protocol. The integrated production system gets the credit for the fact that tobacco is the commercial crop that uses the least amount of pesticides at field level, a result of the constant work of the farm extension agents. We hope that the presentation of the works is cause for satisfaction, and next week, we shall send the final report to Brasilia to be forwarded to the GACC,” Danieli said.

    Zhang Nan Zhengrong, Leader of the China Leaf Company Delegation, presented the pre-inspection report to the attendees of the meeting jointly with the technician responsible for the Central Analytical Laboratory of UNISC, professor Adriana Dupont Schneider. She gave details of the analyses.

    “This year, we analyzed a total of 54 lots with samples collected in eight companies. The laboratory activities took 24 days, and they certified the phytosanitary safety with regard to the nine quarantine pests set forth in the agreement, of which, six are types of insects, two weeds and the fungus known as blue mold. All the results were negative for the pests included in China-Brazil trade protocol,” said Schneider.

    “Tobacco is an agricultural crop that suffers harsh criticism but has been vigorously defended by the MAPA,” said SindiTabaco President Iro Schuenke. “This has a lot to do with the social and economic importance of the crop for our country, especially for the South Region. China is our second-largest importer, coming only after Belgium, and every year purchases big amounts of our tobacco. And this is the moment for a special mention of the farmers that cultivate tobacco in Brazil who, along with the farm extension agents, have performed all the necessary works for our compliance with the necessary requisites that have kept Brazil as top leaf exporter over the past 30 years.”

  • Brazil Volume Down, Earnings Up

    Brazil Volume Down, Earnings Up

    Brazil exported 195.26 million kg of leaf tobacco from January to June, down 8.82 percent from the same period in 2023, according to MDIC/ComexStat. The value, however, increased by 7.56 percent to $1.24 billion. China, Belgium, the United States, Indonesia and Egypt were the top destinations for Brazilian tobacco during the period.

    In 2023, tobacco represented 11 percent of Rio Grande do Sul’s exports, according to SindiTabaco, which expects this share to increase. “The expectation is that we are going to export a smaller volume, due to the smaller size of the crop, but with revenue increasing by 10 percent to 15 percent in dollar terms,” said SindiTabaco President Iro Schuenke.

    Iro Schuenke

    The Brazilian tobacco industry, which is concentrated in the country’s three southernmost states, is still recovering from devastating floods in May.

    A survey carried out by SindiTabaco and its associate companies revealed that the storms hit 75 tobacco-producing municipalities and 1,929 farmers, with losses estimated to amount to BRL95 million.

    According to Schuenke, the impact of the floods was somewhat mitigated by the high per-kilo prices this growing season (see “The Great Scramble”) and the fact that most farmers had already delivered their tobacco to the dealers due to the small crop this year.

    “We regret the one-off losses of some municipalities and tobacco farmers, but we are confident that the size of the tobacco crop in the most affected areas shall remain close to the estimated projections for the 2024/2025 growing season,” he said in a statement.

  • Bearing Fruit

    Bearing Fruit

    Photo: Taco Tuinstra

    Alliance One’s seed breeders in Brazil are boosting crop quality and yields while improving disease resistance and tolerance for extreme weather conditions.

    By Taco Tuinstra

    Small may be beautiful, but in some cases, bigger is better. Take tobacco seeds, which range between 0.5 mm and 1 mm in diameter. A single gram of the material can contain a whopping 10,000 seeds.

    While that may seem efficient, seeds of that size are also difficult to handle. That’s why Alliance One International (AOI) has installed a pelleting machine at its Global Research, Development and Deployment Center in Passo do Sobrado, Santa Cruz do Sul, Brazil. In a process similar to that used by pharmaceutical companies in pill production, the device coats tobacco seeds with a mix of inert materials, including clay (drug companies use gelatin), to beef them up to more manageable dimensions. The seeds that exit the machine are up to 50 times bigger than the ones that go in, allowing the grower to plant them accurately.

    The seed pelleting machine is only one of many investments at the center’s seed industrialization unit, which was inaugurated in January of this year. The facility also houses equipment that performs functions such threshing, grading, upgrading, drying and finishing—capabilities that help improve germination, stimulate healthy, consistent crop development and increase yield. The unit, which sits on an 82 ha farm housing greenhouses, laboratories and other key infrastructure, has an annual tobacco processing capacity of nearly 2 metric tons and the ability to pelletize more than 200,0000 cans of seed for sale each year.

    In addition to commissioning new equipment, the unit has been expanding its skills base, hiring agronomists, biologists and agricultural engineers, among other professionals. During the Brazilian crop’s peak period, the center employs approximately 100 people.

    The investments are part of AOI’s endeavor to strengthen its global function using existing capabilities. AOI has been a major supplier in Brazil’s tobacco seed market for years, selling not only to its contracted farmers but also to other leaf merchants. Roughly 40 percent of Brazil’s tobacco volume, or more than 100,000 hectares, are produced with AOI seeds, according to the company.

    Keen to share the “fruits” of the labor in Passo do Sobrado with its other origins, the seed industrialization unit now also services AOI operations outside Brazil. “Basically, we transformed a local research center into a global research center,” says Helio Moura, AOI’s vice president of global crop science and value chain. Already supplying AOI in Guatemala, Argentina, Turkiye and Thailand, the center is currently in the process of entering additional markets.

    According to Moura, the new unit provides the company with greater quality control and makes it possible for all activities to be governed by the company’s internal integrated quality management system. “Improved quality control opens doors to selling our seed in new markets at a faster speed, increases customer and farmer satisfaction, and drives efficiencies within our business,” he says.

    Those are important benefits because seed breeding is a finicky, labor-intensive and time-consuming business. For example, plants must be pollinated flower by flower—a delicate process that doesn’t lend itself to mechanization. Getting the necessary approvals and certifications requires time too. When you add up all the steps, creating a new variety can take up to 10 years.

    Moura likens the process to a funnel. “You have thousands of breeding lines, then we start selecting and narrowing it down until we are able to launch a better variety than we currently have,” he says, adding that there is always room for improvement. “The latest variety is not perfect, just superior to the previous one,” he observes.

    A single gram of material can contain a whopping 10,000 tobacco seeds. | Photos: Taco Tuinstra

    The seed industrialization unit breeds for characteristics such as quality, yields, disease resistance and tolerance for extreme weather conditions, an attribute that has become increasingly important in recent years, as was tragically demonstrated in early May when Santa Cruz do Sul suffered the worst flash floods in living memory.

    To ensure the required variation, the seed industrialization center houses a germplasm bank with thousands of “mothers” and “fathers” for burley, flue-cured and dark tobaccos, along with oriental styles. “We have access to more than 3,000 different tobacco varieties to cross and create new, unique strains,” says Moura. The resulting hybrids don’t produce seeds, which means they are impossible to replicate and thus guarantee return business for AOI. At least once every three years, seed samples in the germplasm bank are tested to make sure that they are germinating. That way, the company knows they will be available when it needs them.

    With the help of DNA markers, AOI’s scientists identify the desirable qualities. Advancements in biotechnology have made the work quicker, easier and more accurate. “Thirty years ago, there were only a few tools for making selections; nowadays, instead of looking for the phenotypes in the fields, we can look inside the plant and see the genes,” marvels plant breeding supervisor Elaine Batista. What’s more, the cost of equipment has decreased significantly, allowing biologists to make selections quicker, more accurately and with less effort.

    To ensure that the results of its research and development are rolled out correctly, AOI works closely with its contracted farmers. A new variety may deliver superior yields under controlled conditions, but if it’s improperly deployed in the field, the grower will not enjoy the full benefit. “So we spend much time training our growers on the correct way to work with the seeds,” says Moura.

    Aware of the importance of capturing and retaining knowledge within their organization, the scientists meticulously document their work. “For every project, we create a business case and a project brief. If someone asks about it 10 years from now, we can save time and money,” says Moura, who at previous employers faced many situations in which colleagues inquired about a past project only to be told that the results were no longer available, forcing the company to reinvent the wheel. And while it may be tempting to document only the projects that worked, the seed industrialization unit insists on documenting both its successes and failures. “We don’t have the time or money to spend on things that don’t add value,” says Moura.

    Even as demand for cigarettes stagnates and some nicotine users are switching to tobacco-free products, the work carried out at the seed industrialization unit is likely to remain relevant far into the future. As a respected flavorist pointed out during a recent Coresta meeting, consumers are able to tell the difference between nicotine created in a laboratory and nicotine derived from natural tobacco leaf. The depth of expertise and the sheer variety of genetic material housed in Passo do Sobrado will enable the unit to continue developing varieties that not only improve farmers’ operations but also meet and exceed consumers’ expectations for many years to come.

  • Brazilian Flood Damage Assessed

    Brazilian Flood Damage Assessed

    Photo: SindiTabaco

    The floods that hit Rio Grande do Sul in early May have done significant damage to the Brazilian state’s tobacco-growing sector, according to a survey conducted by the Interstate Tobacco Industry Union (SindiTabaco) and its associate companies.

    In all, the floods impacted 1,929 rural properties in 75 municipalities covered by the survey. Candelaria municipality was worst impacted, with 214 tobacco farmers suffering losses. Other heavily impacted municipalities included Agudo (136 affected farmers), Barros Cassal (132) and Venancio Aires (116).

    In terms of monetary impact, Venancio Aires was most impacted, with the industry suffering a loss of BRL18.3 million ($3.37 million). Other hard-hit municipalities included Candelaria (BRL16.52 million in losses), Agudo (BRL6.35 million) and Ibarama (BRL5.96 million).

    We are confident that, in spite of this tragedy, the production of tobacco in the affected areas should remain close to the projections estimated for the 2024–2025 growing season

    The survey also demonstrated that 96 percent of the affected farmers intend to continue producing tobacco. “We need to provide the conditions that make it possible for them to carry on with their activities in the upcoming crop year and, within this context, the associate companies have already replaced the necessary inputs to restore the 2,070 seedbeds of lost seedlings, an investment that amounts to approximately BRL1.6 million,” said SindiTabaco President Iro Schuenke during a meeting with representatives of tobacco growers’ association Afubra, the Federation of Agricultural Workers and the Rio Grande do Sul State Federation of Agriculture.

    “We are confident that, in spite of this tragedy, the production of tobacco in the affected areas should remain close to the projections estimated for the 2024–2025 growing season.”

    While the industry and the tobacco farmers’ representatives are doing their best to minimize losses, they will require public support to rebuild curing barns and access credit lines, according to Schuenke, who noted that many tobacco farmers also produce food crops.

  • Brazil Mulls Higher Minimum Price

    Brazil Mulls Higher Minimum Price

    Photo: Taco Tuinstra

    Brazil’s plans to raise the minimum cigarette price, reports Reuters, citing a government source. The goal is reportedly to offset losses from tax benefits granted to companies in some sectors and small municipalities.

    Brazilians now pay at least BRL5 ($1) for a pack of 20 cigarettes.

    The finance ministry’s executive secretary, Dario Durigan, told reporters the government was not raising taxes on cigarettes. He did not comment on the reports of plans to raise the minimum price to sell them.

    Finance Minister Fernando Haddad said on May 27 that measures to increase revenue are ready and that the government is considering whether to send them to Congress this week or next via an executive order.