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July / August, 2007


Rain finally arrives

After a long and intense early-season drought, much of the American Tobacco Belt received good rains in June and July, and a more normal rainfall pattern seemed to set in as August got under way. The prospects for yield and quality of the crop appeared much better than they had in the spring.

But some areas got too much rain. The state agronomist in Georgia reported rainfall amounts ranging from two to eight inches in one day at the beginning of June; soils were saturated, and roots were damaged, and a few individual crops had to be abandoned.

But most of the flue-cured crop seemed much improved from spring, and harvest got under way in earnest in mid July. Only about 4% had been harvested by that time, according to Universal Leaf’s July 20 report.

The US Department of Agriculture issued its estimate of flue-cured production on July 17. It projected total volume of 476.3 mn pounds, up 7% from its estimate of 446.5 mn pounds in 2006 and 25% above two years ago, the first season after deregulation.

Planted area was projected at 224,000 acres, up 5% above a year ago and 28% from 2005. Yield per acre was projected at 2,126 pounds, up 31 pounds from last year but 56 pounds below the 2005 yield.

All flue-cured states except Virginia were expected to produce higher yields.

North Carolina, the leading flue-cured state, was forecast to produce 342 mn pounds, up 6% from the 2006 crop, while planted area at 163,000 acres was 5% above last year and yield per acre at a projected 2,100 pounds, up 10 pounds from 2006.

In the other states, production was projected as:

  • South Carolina, 48.4 mn pounds, up less than 1% from a year ago;
  • Virginia, 45.6 mn pounds, up 10% from the 2006 crop.
  • Georgia, 40 mn pounds, up 33% from the 2006 crop.
Universal Leaf’s report was considerably more optimistic. It projected flue-cured production at 523.6 mn pounds, up 13% from its estimate of 2006 volume of 462 mn pounds.

The leaf dealer described crop quality as average in Florida and Georgia, average to above average in South Carolina and Eastern North Carolina and average to slightly below average in the Old Belt of North Carolina and Virginia, due to dry weather.

A grower near Raleigh, North Carolina said as July ended that the majority of his tobacco crop was doing well.

“I’ve had to irrigate quite a bit,” said Sammy Tant of Nash County, North Carolina. “About 75% to 80% of my crop is in good shape, and about 20 to 25% could come back if we get rain.”

The rain he had gotten had been scattered, he said.

“Most of my farms have had almost three inches of rain in two months, and some have had less than an inch in that same time period. On the part that has had rain, I’m looking at a good crop.” - (Bickers)

Burley prospects keep shrinking
The yield consequences of the excess rain in the leading burley state of Misiones continued.

Universal Leaf reduced its July estimate of Argentina’s burley crop by another 1.8 mn kgs down to 37 mn kgs. The reduction was almost entirely due to the growing shortfall in Misiones.

Receiving of the 2007 Misiones crop was delayed and had not ended in early July. But seedbeds are being sown for the 2008 crop. The forecast is for 49.8 mn kgs. - (Bickers)

Production up nearly 50%
The volume of Bulgaria’s 2007 leaf crop is reportedly well above 2006. In July, Universal Leaf estimated production at 25.3 mn kgs, up 45% above the 17.4 mn kgs produced in 2006. Among the three major producing areas:
  • The Krumovgrad crop is estimated at 16.0 million kgs, up about 25% over 2006 due to higher demand and an expected return of farmer yields to more normal levels.
  • The East Balkan crop is estimated at 1 mn kgs, an increase over the 0.6 mn kgs of 2006.
  • The Basma crop is estimated at 0.6 mn kgs, a 25% decrease from 2006.
- (Bickers)

Karnataka Readying for Tobacco Auctions
Tobacco auctions in Karnataka are set to commence in the first week of September. The Tobacco Board has fixed the state’s 2007 crop size at 95 mn kg, an increase of 14% over the pervious year’s target (2006).

According to a Tobacco Board official, the production level is expected to remain at last year’s level of 97 mn kg. “Due to excess rainfall in parts of HD Kote, Periyapatna, and Ramnathapura, the crop’s vegetative growth has suffered a set back. However, dry regions like Hunsur and Kampalapura have reported good growth,” the official added.

In 2006, the state’s tobacco crop size was fixed at 83.27 mn kg. However, owing to the good quality of the crop, 97 mn kg was produced and sold. Farmers earned an average Rs 55.94 per kg against Rs 48.06 in 2005.

Karnataka has 85,000 hectares under tobacco cultivation in the districts of Mysore, Hassan, and Shimoga with 41,000 registered growers and 56,630 barns.

The seven-month long tobacco auctions (2006-07) have ended in Guntur with farmers selling 171,954,853 kg of flue-cured Virginia (FCV) tobacco for Rs 816.27 crore at an average price of Rs 47.47 a kg, considered the highest. Last year, the farmers produced 145.36 mn kg for an average price of Rs 46.33 a kg.

The farmers harvested 83.74 mn kg of bright (super quality) grade tobacco, 56.10 mn kg of medium grade crop and 32.09 mn kg of low-grade tobacco. With production exceeding the authorized crop of 145.56 mn kg by around 27 mn kg, the Tobacco Board was forced to impose a penalty of 15% on the excess crop value.

According to the figures provided by the board, the farmers of Devarapalli auction in West Godavari district earned the maximum average price of Rs 55.46 a kg and their counterparts of Thorredu floor in Khammam district were paid an average minimum price of Rs 42.38 a kg.

The farmers of southern light soils (SLS) in Prakasam and Nellore districts had produced 57,749,622 kg tobacco and earned Rs 257.06 crore. The growers of southern black soils (SBS) in Prakasam district sold 54,848,842 kg for Rs 248.90 crore and their counterparts of northern light soils (NLS) in the two Godavari districts harvested 47,718,581 kg for Rs 258.34 crore.

In Khammam district, the farmers of northern black soils (NBS) reaped 6,222,590 kg tobacco for Rs 26.62 crore. Their counterparts of central black soils (CBS) in Krishna and Guntur districts cured 5,415,218 kg and reaped Rs 23.49 crore for the crop.

J Suresh Babu, the Chairman of the Tobacco Board, said the board had fixed 150 mn kg as the target for 2007-08, allowing for 10% additional crop.

According to the Board Chairman, auctions were incident free and farmers were satisfied with market prices, which did not fall despite the massive crop supply.

Tobacco Sales Up
A total of 57.3 mn kg of flue-cured tobacco valued at US$134.6 mn were sold at the country’s three auction floors, according to figures recently released from Zimbabwe’s Tobacco Industry and Marketing Board (TIMB).

Of the three auction floors, Burley Marketing Zimbabwe had sold 7.69 mn kgs valued at US$18.366 mn; Tobacco Sales Floor had sold 8.4 mn kgs valued US$20.3 mn; Zimbabwe Industry Tobacco Auction Centre has so far sold 7 mn kgs with a value of US$17.2 mn; and contract tobacco farmers have 34 mn kgs with a value of US$78.66 mn. The selling season has also seen an increase in the price, which averaged US$2.34 from US$1.96 in the previous season.

Industry experts say the increase in the tobacco support price to $55,000 per kg from the initial $40,000 is meant to lure farmers to sell the crop as the nation braces to achieve the 80 mn kgs target set at the beginning of the season.

Zimbabwe’s tobacco output has plummeted over the years to 55.5 mn kgs last year from a peak output of 236 mn kgs in 2000. The tobacco output has been on a free fall since the government embarked on a controversial, violent land reform programme in 2000. The new breed of farmers that took over vast tracts lacked the skills and capital to engage in successful tobacco farming.

Gutu North ventures into irrigated tobacco

Planting of the maiden irrigated tobacco in Gutu North is set to commence in September with nearly 200 hectares of the targeted 1,200 hectares already prepared.

The move is expected to increase agricultural production in the area that mainly produced maize and sorghum.

The Tobacco Industry and Marketing Board has targeted 60,000 hectares although farmers have pledged to increase the total hectarage to 100,000 hectares of land under tobacco for the 2007–08 season.\

Tobacco International - July/August, 2007

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