increased in 2005 to a peak of 24 bn pieces, valued at $160 m. Strong gains for cigarette exports are occurring when Greek leaf tobacco production is down, thus causing imports of tobacco to rise. Over half of Greek cigarette output was exported in the last several years. Dramatic gains for cigarette exports to markets in Africa contributed to the increase in Greek cigarette exports, despite some loss of sales to the competitive setting in the Middle East. Greek cigarette exports to Albania and some countries bordering the Black Sea were higher in the last several years than during 2000–02, as traders made contracts with many importers to illustrate quality brands and new packaging. Multinationals provide a wide assortment of cigarette brands for export, as do the smaller Greek manufactures such as Karelia and Sekap.
Membership in the European Union has brought substantial benefits to Greece. Use of the euro for financial matters contributed to greater Greek exports of leaf tobacco to other EU members during 2005, with substantial gains for shipments to Germany, Netherlands, and Belgium. The Greek economy has received benefits from advantages of free trade among EU members and more favorable business contacts with traders in many countries.
Domestic Cigarette Demand Strong: The average retail price for cigarettes in Greek stores is in the range of $2.60 to about $3 per pack. Domestic cigarette consumption increased in the last three years. Some reports indicate that cigarette sales in Greece may rise to a range of 26 bn pieces in 2006, compared with about 18 bn pieces annually during 2001-03. Some of the rising demand stems from workers in Greece from Albania, Macedonia, and some other countries.
Exports provided an opportunity for some Greek cigarette manufacturers to expand sales at a faster pace than might be possible in the competitive domestic market. Marlboro is the leading brand sold in Greece. Philip Morris accounts for over a fourth of the domestic brands sold in Greece through 2003, and its share advanced further with the help of mergers with smaller Greek manufacturers. Brands from BAT accounted for about 14% of the market in some recent years. JTI brands accounted for about 12% of the domestic market. Smaller Greek cigarette manufacturers have been able to participate more actively in exports to many countries.
Greek Exports to Africa Rising: The value for Greek cigarette exports to markets in Africa now exceeds $66 mn annually. The leading cigarette importer in Africa is some recent years is also the top customer for Greek cigarette exports. Mauritania has good foreign exchange inflows from large exports of iron ore, but lacks modern cigarette factories. Greek exports of cigarettes to Mauritania increased 42% to a peak of $36.9 mn in 2004, but dropped 6% to $34.8 mn in 2005. The average price of about 15 U.S. cents per pack of 20 for Greek cigarettes to Mauritania contributes to the important share for Greece in the leading cigarette importer in Africa.
Greek cigarette exports to Niger rebounded to $11.3 bn in 2005, for an average price of about 16 cents per pack of 20. Exports of cigarettes from Greece to Benin zoomed from only $144,000 in 2003 to $3.26 mn by 2005. Some of the cigarettes delivered to Benin are distributed to shops in Nigeria. Greek cigarette exports directly to Nigeria declined from $875,000 in 2004 to only $106,000 in 2005. Shipments of Greek cigarettes to Djibouti dropped from $1.07 mn in 2004 to $270,000 in 2005.
Path Through Turkey Used to Get Greek Cigarettes to Iran and Iraq: The path through Turkey for making delivery of Greek cigarettes to the important hinterland markets of Iran and Iraq became more complicated in the recent year. Turkey was a market for about 4 billion Greek cigarettes annually during 1999-02, before shipments to Mauritania became more important. Trading activity by cigarette exporters from other countries tended to limit Greek efforts to greatly expand sales to Turkish transit traders, although the value for shipments rose by nearly a fifth in 2005. Yet, the Greek share for cigarette sales in Iraq probably declined in the recent year. Other countries delivered more counterfeit cigarettes at the free trade zone in Mersin harbor. This apparently limited gains for Greek cigarette exports to Turkey to $7.75 mn in 2005, compared with $6.5 mn in 2004.
Fluctuations Reported for Greek Cigarette Exports to Middle East: Exports of Greek cigarettes to Egypt rebounded from $11 mn in 2004 to $13.2 mn in 2005. Output of cigarettes in Egypt has sometimes lagged behind demand. Some of the cigarettes delivered to duty-free zones may be purchased by Egyptian workers on the way to jobs in the Arabian Peninsula and Iraq. Reports for cigarette imports clearing customs into the Egyptian market are far less than the reported exports to Egypt by EU member.
Exports of cigarettes from Greece to Israel declined from a peak of $5.5 mn in 2004 to $3.5 mn in 2005, mostly because of increased competition from deliveries by other exporters. Reported direct exports to some countries in the Middle East provide only part of the story concerning sales of Greek cigarettes to some countries. Use of transit traders in Turkey, UAE, and some other countries has been important in reaching smokers of Greek cigarettes in Iran and Iraq. Duty-free ports in UAE, Oman, and Kuwait are important for deliveries from Greece before arrangements are made to distribute them in Iran. Greek cigarette exports to Lebanon reached a peak of $1.78 mn in 2004 – quadruple the 2004 level.
Rebound for Exports to Some Markets With Ports on the Black Sea: Newer markets were sought after the important destinations like Russia and Ukraine developed a dynamic domestic industry to supply smokers in their countries. Greek cigarette exports to Russia and Ukraine and some countries of East Europe declined during 1999-03, but showed a rebound in 2005. Greece has been successful in finding new customers for cigarettes in recent years, plus making sales after revisiting some former customers. Greek cigarette exports to Russia rebounded from $1 mn in 2004 to $2.74 mn in 2005. Exports of cigarettes from Greece to Moldova increased to $619,000 in 2005 – about triple the 2003 value.
Bulgaria Is an Important Market for Greek Cigarette Exports: Bulgaria was a market for Greek cigarette exports valued at about $19 mn in 2003 and $25 mn in 2004, before dropping back to$19.3 mn in 2005. Shipments to Bulgaria during 2003-05 averaged $21.2 mn annually, compared with $9.7 mn annually during 2000-02. Sales of cigarettes made in Greece have done well at tourist centers near the Black Sea of Bulgaria.
Albania Is a Convenient Market for Greek Cigarette Exports: The rise and fall of Albania’s cigarette output and exports left the country with domestic production of only about a tenth the peaks attained during the 1970’s. Greek cigarette exports to Albania reached $18.7 mn in 2004, before falling to $17.8 mn in 2005. In addition to the reported exports, Albanian shoppers and workers are important customers for Greek cigarettes.
Cigarette Exports to Other EU Members Face Strong Competition: Greek cigarette exports to other members of the European Union remained small through 2004, because the major exporters in Germany, Netherlands, UK, Denmark, and France make it difficult for sales from Greece to flourish within the EU. A surprise jump was recorded in 2005, when Greek cigarette exports to Germany rose to $6 mn, compared with $116,000 in 2004. That may have been related to rising German cigarette exports to East Europe. Exports of cigarettes from Greece to other EU members averaged about 210 million pieces annually during 2000-03. Greek cigarette shipments to the Netherlands declined from $294,000 in 2004 to $70,000 in 2005.
U.S. Market for Greek Cigarettes Below Earlier Peaks: Imports of cigarettes from Greece into the United States declined from a peak of $6.5 mn in 2001 to a low of $2.36 mn in 2004, and rebounded to $2.8 mn in 2005. Then they declined 57% to $834,000 during January-July 2006. Restaurants and special stores are places where some of the traditional Greek brands are sold.
Greek Cigarette Imports Provided Mostly by Other EU Members: Cigarette imports into Greece increased 17.8% in 2004 to a peak value of $193 mn, and then retreated by a tenth to $173.3 mn in 2005. Popularity of brands of blended cigarettes from Germany, the Netherlands, and UK accounted for much of the rise in imports in recent years. Greece imported an average of about 12.5 bn cigarettes annually during 1999-02, compared with about 13 bn annually during 2003-05.. The average retail price for imported cigarettes is higher than for domestic supplies. Brands from the major multinationals are shipped to Greece through the European Union duty-free arrangements.
Competition among major EU cigarette exporters has been keen in the Greek market. Germany surpassed the Netherlands to become the leading source of Greek cigarette imports in 2005, when its market share approached 32%, compared with 22.4% in 2003. The Dutch share of Greek cigarette imports fell from 36.3% in 2003 to 26.2% by 2005. The UK share for Greek cigarette imports remained steady at 20% in 2005. The share of cigarette imports arriving from Denmark reached 13.3% in 2005, compared with 9.8% in 2003. Deliveries of more premium brands contributed to a rise for the French share of Greek cigarette imports from 1% in 2003 to 3% by 2005.
Greek Cigarette Exports Go to Many Markets: Most of the exports of cigarettes from Greece go to countries outside the EU. Greece may export over 25 bn cigarettes in 2006. Although cigarettes go to many markets, the Middle East was the area with the most growth in sales during 2000-02. Shipments of Greek cigarettes increased to Africa increased sharply in 2003, and remained at a high level through 2005. Stores for mining firms in Mauritania and Guinea are interesting customers for imported cigarettes. From the trade shops in Djibouti, Greek cigarettes are sold to customers from Ethiopia, Eritrea, and Sudan.
Lower prices have helped Greek cigarette exports to remain competitive. Importers in the Middle East appreciate the chance to buy a wide range of brands from manufacturers in Greece. Premium brands of long cigarettes are available from Greek exporters, along with a wide range of less costly brands. Libya was an expanding market for Greek exports in the last several years.
Greek Leaf Tobacco Production Marked by Downward Trend: Tobacco production in Greece has remained steady in the last several years with the help of relatively favorable prices, subsidies, and special government payments. Farmers in Greece declined from an average of 137,625 tons during 1999-01 to 126, 671 tons in 2003, and then declined in 2004 to 117,000 tons.
As production drifted lower and demand from cigarette manufacturers remained strong, stocks of tobacco have been reduced. About 80% of the Greek tobacco crop is usually exported. Next to Italy, Greece is the second major producer of tobacco in the European Union. Greece is the second major producer in the EU, following Italy.
Tobacco production in Greece during 2006 may have declined to only about half the 1999-2001 average. Greek production has shifted to the more popular types of oriental tobacco, including Basma and Katerini. They have shifted away from varieties not appreciated for quality. A lack of scheduled subsidies contributed to a reduction for the area planted in tobacco during 2006. About 55,000 farmers in Greece grow oriental tobacco, but the average grower cultivates only about 1 hectare of this valuable crop.
Exports of Leaf Tobacco Increased in 2005: Greek exports of leaf tobacco rebounded to 94,020 tons in 2005, and the value climbed 28.2% to $367.6 mn. However, the downward drift for leaf tobacco exports is expected to return in 2006 because of smaller production. Greek leaf tobacco exports fell from a peak of 100,889 tons in 1999 to an average of 81,651 tons during 2002-04.
Greek Leaf Tobacco Exports to United States up Sharply in 2005: Exports of leaf tobacco from Greece to the United States increased 52% in value during 2005 to $60 mn. Greek oriental tobacco is noted for good quality and apparently the average price is expected to rise as production declines. The average price for U.S. imports of leaf tobacco from Greece exceeded $5,500 per ton during 2005.
Leaf Tobacco Exports to Germany Rebounded in 2005: Greek exports of leaf tobacco to Germany rebounded 15% in 2005 to $37.9 mn. During the late 1990’s and through 2001, Greece was usually the fourth major source of German tobacco imports.
Dutch Purchases Rebounding: Greek leaf tobacco exports to the Netherlands increased to nearly $34 mn in 2004, compared with $9.5 mn in 2004. Use of more Greek oriental tobacco for blending in manufacture of American blended cigarette brands at the modern factory in Bergen op Zoom contributed to the increase in shipments.
Russia Was A Larger Market for Greek Tobacco in the Past: The value for Greek exports of leaf tobacco to Russia averaged about $27 million annually during 2000-02, but shipments fell a fifth to $15.7mn in 2005. Greek exports of leaf tobacco to Russia fell from 10,915 tons in 2000 to an average of about 6,500 tons annually during 2003-05.
Leaf Tobacco Exports to Algeria up in 2005: Greek exports of tobacco to Algeria averaged about $7 mn annually during 2002-04, but they rose 48.7% in 2005 to $11.4 mn. Algeria uses oriental tobacco from Greece and Turkey to blend with flue-cured imported from countries in Latin America and Africa.
Leaf Tobacco Imports Shift to U.S. And Brazil to Offset Dwindling Deliveries From Zimbabwe: The value for Greek leaf tobacco imports advanced 16.8% in value to $146.9 mn in 2005, as arrivals from the United States more than doubled — reaching $35.3 mn. Greece was a boom market for U.S. burley tobacco in 2004. Greek imports of tobacco from Brazil rose nearly 18% to $19.2 mn in 2005 Imports of leaf tobacco from Zimbabwe into Greece dived from $8.3 mn in 2003 to only $4 mn by 2005..
The combination of declining domestic tobacco production and expanding cigarette exports has pushed up the demand for imported leaf tobacco. Greater output of blended brands bolstered demand for flue-cured and burley tobacco, as the market share as the oriental type of cigarettes declined.
Imports of leaf tobacco into Greece increased from a low of 14,461 tons in 1998 to a peak of 23,987 tons in 2002, and remained in this range during 2003-05. Greater imports of quality tobacco caused the average price for leaf tobacco imports to reach $4,694 per ton in 2004 — a gain of 12.4% over 2002. A further rise for the quantity of leaf tobacco imports to about 25,000 tons in 2006 may occur because of expanding cigarette exports and declining stocks.