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June, 2008


Production in Turkey and other parts of Eastern Europe keeps declining

Except for Bulgaria, all of the major Oriental-producing countries were down in production in 2007 compared to the year before, according to the Universal Leaf World Leaf Production Summaries for January and April of 2008.

In Bulgaria, 2007 Oriental production was estimated at 18.2 mn kg, an increase of about 5% over the 2006 crop. The 2007 Krumovgrad crop was estimated at 16 mn kg, up about 25% over the previous year. Quality was expected to be similar to that of the 2006 crop, with the early transplanted upper stalk crop better than 2006. The East Balkan crop is estimated at 0.7 mn kg, up slightly over 2006. The Basma crop is estimated at 0.2 mn kg, a 74% decrease from 2006.

In Greece, 2007 Oriental production was estimated at 19.5 mn kg, a decrease of about 10% from the 21.8 mn kg produced in 2006. For Basma, the estimate was 9.5 mn kg versus the 11.6 mn kg produced in 2006; drought conditions and high temperatures in June and July decreased the yield and quality of the lower stalk. The Katerini crop was estimated at about 10 mn kg, down slightly from 2006, with about 8.0 to 8.5 mn kg from the “classic” areas of Katerini, and 1.7 to 2 mn kg from “non-classic” areas. Quality was lower than in 2006, mainly due to the extreme high temperatures.

In Macedonia, 2007 Oriental production was estimated at 17.1 mn kg, a decrease of 6.1 mn kg, or 26%, from the 23.2 mn kg produced in 2006. The 2007 Prilep crop was projected at 10 mn kg, down 5 mn kg from 2006. The Yaka and Basma crops were estimated at 5 mn kg and 2.1 mn kg. For all three types, the lower stalk was reportedly below average in quality. But the quality of the middle and upper stalk in all three were reported to be average to above average.

In Turkey, Oriental production was estimated at 84.1 mn kg in 2007, about 10% below the 93.2 mn kg produced in 2006. The Izmir crop was estimated at 45 mn kg, a decrease of 8.9 mn kg compared to 2006. Quality is expected to be average to below average, but the higher stalk position is expected to be of better quality than the lower ones. The Samsun crop was estimated at 10 mn kg, up slightly over 2006. Quality was expected to be average to above average. The Basma crop was estimated at 3.1 mn kg, with quality expected to be average. - Bickers

Freeing up tobacco land for farmers
Havana - The commitment of the new leadership of Cuba to maximize its tobacco production could hardly have been made clearer this spring.

In April, the President of the quasi-governmental association of Cuban farmers flatly told the Associated Press news agency that would-be leaf growers will no longer be hindered by a lack of agricultural land.

“Everyone who wants to produce tobacco will be given land to produce tobacco,” said Orlando Lugo.

The agency reported that 51% of Cuba’s arable land is currently underused or fallow, and this appears to be a resource that Raul Castro and his colleague’s are no longer willing to leave untouched. Officials are already said to be transferring some of the land to individual farmers and farmer associations. The program began last year but was not revealed to the public until last month.

More details came to light on May 1, when an article in Granma, the official newspaper of the Cuban Communist Party, reported that management of the country’s farms - not just tobacco - has been transferred from the national agriculture ministry to new local delegations.

The move is intended to “stimulate agricultural production, perfect its sale and increase the availability of food and, in this way, substitute imports,” Granma said.

At the same time, the country has been making additional production resources available to tobacco growers and will continue to do so, according to the Prensa Latina news agency. Raul Relova, head of Supervision and Control of TabaCuba, a national agency, said the amount of tobacco irrigation water available to farmers will be increased, which should result in a 30% or more increase of output. He noted that the water would be drawn only from the “safest” sources.

Some new disease-resistant varieties should also contribute to better yields, Relova said.

Perhaps the best news for tobacco farmers is that TabaCuba will increase the price paid to tobacco producers by up to 50%.

Another report indicated that there should be a good market for next year’s Cuban crop. Cuban cigar sales rose 7% to US$402 million in 2007, Habanos SA said in February. - (Bickers)

Farmers protest subsidy reductions
Athens - Tobacco growers in Greece are losing interest in the crop, and the number of growers has shrunk from around 50,000 to 15,000 since 2006, according to the International Union of Tobacco Planters.

Production has spiraled down by 80%over the same period, the organization said.

Those who remain are desperate for help. Around 1,500 Greek tobacco growers marched in Athens in mid April in opposition to the reduction of European Union subsidies currently taking place, the Agence France Presse news agency reported.

“We demand a return to a 100% subsidy scheme for our produce,” said George Doubliotis, a senior member of the Greek tobacco growers federation. - Bickers

Tobacco sales resume, farmers happy with prices
Lilongwe - Tobacco sales resumed at the Lilongwe Auction Floors with most farmers declaring some degree of satisfaction with the current prices.

This comes after the temporary suspension of sales as the price of tobacco hit 60 cents US per kg.

Once the new prices came into play, leaf hit a record of US$11 per kg. Farmers are pleased with the prices and as long as this trend continues are not expected to leave the auction floors.

Tobacco is Malawi’s major foreign exchange product, accounting for approximately 60% of the country’s exports.

FBR changes tobacco-threshing rules
Islamabad - The Federal Board of Revenue (FBR) has made it mandatory for green leaf-threshing units to issue a tax invoice and declare all warehouses, depots, and stores for storage of processed un-manufactured tobacco to the Collector of the given jurisdiction.

Tobacco-selling season has begun
Harare - After some delays, the 2008 tobacco-selling season is expected to begin.

The Tobacco Industry and Marketing Board had made an announcement regarding the start of the season, but did not mention what, if anything, had been agreed upon with respect to concerns raised by tobacco farmers, such as the support price.

Tobacco farmers were also asking for a new exchange rate in addition to the settlement of Foreign Currency Account deficits. There have been reports of tobacco farmers in Malawi who have ceased delivering tobacco as an act of protest over the offered price of US$2.40 per kg, compared to the US$10 per kg offered on the international market. Current prices are fluctuating around US$3.

Nearly 80 mn kg of flue-cured tobacco are expected on the auction floors, up from last year’s 73 mn.

Tobacco International - June, 2008

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