Tag: Missirian

  • Difficult Dynamics

    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.
  • Holding the Line

    Holding the Line

    Photo: Schmidt Pest Management Consulting

    The war on tobacco insect pests continues.

    By George Gay

    On being asked recently whether the war against tobacco insect pests would ever be won, most of the experts and interested parties contacted, referring mainly to post-harvest tobacco in transit or storage, said no, qualified in one way or another. But Vernon Schmidt of Schmidt Pest Management Consulting wondered whether “winning” or “losing” was the best way to judge what was happening overall. The important point in the battle against the tobacco beetle and tobacco moth, he said, concerned whether industry players were working together, communicating well and implementing fundamental pest control strategies. In other words, was the industry stewarding its resources well to allow it to use the tools available to it wisely and thereby minimize tobacco and tobacco product losses?

    “Communication lines need to remain open, and cooperative research needs to be supported by the players within the industry in order for us to stay ahead of the insect pests,” said Schmidt in an email response. “This is the brilliance of Coresta and the work of its Subgroup on Pest and Sanitation Management in Stored Tobacco [PSMST].”

    Worryingly, however, he added a caveat that is unlikely to have come out of the blue. “Pulling out of cooperative endeavors and doing it on our own will not be a winning strategy,” said Schmidt, who was closely associated with Coresta and the PSMST in the past, and who is likely to be so again shortly after a break made necessary by his transition from an employee of Reynolds American to starting his own consultancy.

    And Schmidt had other warnings. There would be no success without the industry’s putting in the hard work of implementing fundamental pest control practices, and there would still be challenges, he added, even where the fundamentals were in place. Phosphine resistance remained a challenge and would continue to worsen if the industry did not address the causes. Insisting on quality phosphine fumigations remained a must, and consideration had to be given to eliminating ineffective fumigations, such as container fumigations, or, at least, implementing measures to improve them greatly by, for instance, requiring barrier sheeting be placed on the floors of containers before loading to minimize gas leakage.

    And in what seemed to me to be a minor bombshell, Schmidt admitted that the way in which phosphine worked as a fumigant still needed to be understood better and should continue to be investigated cooperatively. Such investigations, he added, would likely lead to a revision of the Coresta Fumigation Guide and require a new round of global training.

    Exploring Alternatives

    At the same time, the 30-year search for an alternative to phosphine should continue, again co-operatively, said Schmidt. There was promising work underway investigating a potential alternative to phosphine, sulfuryl fluoride, which offered a completely different mode of action from phosphine. This had the potential to break phosphine resistance where it existed and, additionally, preserve phosphine as an excellent tool for the industry.

    And moving away from fumigation techniques, Schmidt said controlled atmosphere (CA) and freezing treatments should be implemented where feasible.

    Rene Luyten, a director at b-Cat, which installs CA chambers, made the point that tobacco insects were difficult to control, partly because they were able to adapt to new circumstances. In other words, while it was possible to eliminate such insects in individual tobacco batches, there were often routes through which others could enter those batches. In part, this was down to the very nature of tobacco, which is a bulk product subject to transportation, division into smaller consignments and storage. Additionally, tobacco doesn’t exist in isolation but is sometimes stored alongside other products that also provide homes and breeding grounds for insects of concern.

    Indeed, Luyten said it was possible to have in-house clean tobacco free of insects or to receive clean tobacco on one day and the next day to have a huge issue with insects. Of course, the severity of the problem would depend, in part, on the location of the warehouse, with those in warmer climes likely to experience more insect activity. But such issues could arise in many places, added Luyten, even when everybody in the tobacco chain did their best to avoid infestation. Fumigators might comply with best practices that conformed with the guidelines laid down by Coresta. And warehouses might employ best practices in respect of storage, including the use of good sanitation programs. But it wasn’t always possible to have control of all factors, such as when a neighboring warehouse storing raw food didn’t employ strict and proper sanitation protocols.

    Controlled atmosphere technology offers a “green” solution for pest control.
    (Photo: b-Cat)

    Positives and Negatives

    Schmidt, too, saw positives and negatives stretching along the supply chain. A positive would see farmers eliminating carry-over tobacco, but the fact that farmers were unable to treat their post-harvested tobacco was a negative, he said. The receipt by processors of infested tobacco was a negative while the lethal effects to insects of processing was a positive. Reinfestation during transport was a negative while monitoring programs for transported tobacco provided a positive. Good segregation practices during storage constituted a positive, but undetected phosphine resistance was a negative. Continually improved cleaning programs at manufacturing plants constituted a positive, but insect harborages that could not be eliminated without dismantling equipment comprised a negative.

    There is at least one caveat you have to add to the idea that the war against tobacco insects cannot be won. It can be won in the sense that insects of all types and in all their life stages can be eliminated from tobacco just before it is manufactured. Luyten said an increasing number of tobacco manufacturing plants were installing CA technology, which he described as a “green and natural treatment method” offering a 100 percent mortality rate among insect pests in all their life stages. In fact, b-Cat’s main building program currently involves installing CA facilities, including remote control and monitoring systems, at manufacturing sites.

    Away from the major manufacturing sites, things are rather different. For instance, Guy Harvey, the CEO of Transcom Sharaf in Africa, who is based out of Mozambique, said businesses in that part of the world used only chemical fumigation, though this was not for want of trying other methods. Harvey said his company had completed trials on the use of CA in Mozambique but that it seemed the industry was not ready for it yet, which I took to mean that companies further down the supply chain were not willing to help pick up additional costs arising from CA. Certainly, in Harvey’s view, the capital costs of CA were holding back its use in Mozambique.

    This might be unfortunate, though it has to be remembered that fumigation can be effective. Nico Vroom, who runs the consultancy N.I.C.O, also believes the war against tobacco insects will never be won, but he believes, too, that infestations can be kept to a “manageable level” through the use of good fumigation practices and through the employment of recent technological advances, such as sensors for constantly monitoring tobacco.

    While complete victory in the battle against tobacco insects is some ways off, infestations can be kept to a “manageable level” through the use of good fumigation practices and through the employment of recent technological advances, such as sensors for constantly monitoring tobacco.
    (Photo: Transcom Sharaf)

    Ongoing Monitoring

    One respondent who didn’t give an unequivocal “no” in answer to the question about whether the industry was winning the war against insects was Steven Bailey, managing director of the Barrettine Group, which manufactures the Mobe Combo insect monitoring trap. Bailey said he thought it unlikely that the industry was winning the war, but that it might be holding its own. Traditional treatment methods using fumigants were limited to only a few. He was unaware of any new pesticides coming through beyond, perhaps, sulfuryl fluoride, he added, and due to high regulatory and approval costs, didn’t expect there to be any anytime soon. This, together with ongoing phosphine-resistance issues, was a concern, but CA treatments in conjunction with insect monitoring and traditional methods were helping the industry to stay on top of the problem. The importance of ongoing insect monitoring was therefore essential in pinpointing infestations so that control measures could be carried out as soon as identified, thus preventing any infestation from escalating. 

    One of the matters that gets little airing in respect of tobacco insects concerns responsibility. Who is or should be responsible for ensuring tobacco is taken in at its destination—at the manufacturer’s site—insect-free? 

    Well, according to Rainer Busch of NewCo, currently, the shipper is obliged to fumigate tobacco before loading, even though it is very difficult for the shipper to control what happens to that tobacco during transport and when it is opened at its destination. And if the tobacco was found to have insect infestation at its destination, to have been infested during transport, it was necessary to refumigate it or put it through another treatment. It would therefore be better economically and financially to avoid having to carry out two treatments by switching the fumigation or other treatment from the point of shipment to the destination.

    It would seem that while the industry might not be winning the war against insects, it is not losing all the battles. Evripidis Christidis of Missirian told me that the application of integrated pest management techniques was helping the industry to win in the region in which his company operates—the region where classical oriental tobacco is produced. In general, the amount of leaf tobacco currently lost to insects was proportionally less than it had been during past decades. But, he added, this sort of success required close attention being paid in five areas:

    • Personnel training and awareness;
    • Facilities management, including cleaning and sanitation, operating with open structures and creating barriers to insects, such as air curtains and mesh nets, and segmenting the green and final products;
    • Selection of suitable means of transportation;
    • Pest monitoring, with pheromone traps, and the use of UV lamps and space/surface fogging when necessary during tobacco storage; and
    • Pest control methods.

    Another factor that had helped the industry attain better results was the use of only specialized and licensed contractors to perform control and prevention activities, said Christidis. And yet another had been the introduction of Coresta standards for the fumigation in respect of resistant beetle populations, which basically involved higher phosphine concentrations and longer exposure times. A radical but expensive proposal would involve vacuum or nitrogen packing of the final leaf product.

    Learning Lessons

    The importance of Coresta was raised by most respondents, and so it is unfortunate that the Covid-19 pandemic has interfered with some of its work, including the PSMST’s Infestation Control Conferences that, until the pandemic struck, had been held annually around the globe. Of course, there have been other problems caused by the pandemic. Shipping delays have created tobacco transport congestion, and there have been interruptions caused by staff shortages, supply chain difficulties and other transport issues. But the pandemic has also caused a lot of rethinks, some of them positive. Luyten told me that while the start of the pandemic had caused concern, it turned out the past two years had been the best ever for b-Cat’s business. When travelling became almost impossible, it was discovered that internet communications using Teams or Zoom could easily stand in for some face-to-face meetings. “I do hope that everybody is having the same idea,” said Luyten, “that we have learned from this pandemic that travelling, which was a common thing, is not always needed. We all can save a lot of time and help the planet.”

    Which brings us, perhaps, to the most important question. In fighting tobacco insects, are we winning or losing the environmental battle? And there seems to be some good news here. Schmidt told me that industry practices had little negative environmental impact. Beneficial insects were not threatened by current common practices, he said, and phosphine readily broke down in ultraviolet light. At the same time, however, continued training on best practices would help with reducing the improper use of insecticides and excessive fumigant use.

    George Gay is Tobacco Reporter’s European editor, but his territory spans the globe. Based in London, George has covered the tobacco industry since 1982, initially for a U.K.-based publication and since 2004 for Tobacco Reporter. George’s understanding of industry issues, combined with his keen sense of observation and dry wit, have earned him a loyal following among Tobacco Reporter’s readers.