Crop Report June 2019

Argentina

100% of the FCV production was received and purchased by the companies. Approximately 90% is already processed and the remaining should be completed by the end of June.

Despite the good weather conditions in 2019, the FCV production lost over 2M kg due to late and severe hail storms in the province of Salta resulting in a total country production of 65,7M kg of FCV. It was a good year in terms of FCV quality with orange to intense orange colour and very good maturity level.

Burley production is affected by irregular rainfalls in 2019. In the Province of Tucuman, the production is suffered due to heavy rains that affected the lower land and it was calculated that 2 Million kg were lost, the total output of the Province in conjunction with Catamarca is of 5 million kg. In the province of Misiones, near the border with Brazil, the production reached 30M kg of good quality tobaccos.

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Brazil

FCV crop is projected at 590 million kg for 2019. 75% of the FCV production was received and purchased by the companies. Companies started late to process their green intake and by now around 60% can be considered as processed.

The weather conditions were considered better than last year and the quality resulting of the leaf is in line with a flavour crop.

The adjust in the green prices paid to farmers combined with the devaluation of the local currency resulted in FOB prices similar to last year and in some cases with a small discount. However, there is a lot of tobacco in the fields still and more customers are expected to show up on the second half of the year.

The production of Burley tobaccos is expected to reach 75M kg and by now around 60% has been purchased. Receiving from farmers is ongoing and companies are processing at a slow path. Its quality is better than last year with a much softer nature and good content of nicotine.

USA

FCV transplanting is completed in Florida, Georgia and South Carolina. The Eastern Belt of North Carolina is nearing completion, while farmers in the Middle and Old Belts are approximately 75 percent completed. In 2019, 160,000 acres are planted with FCV seeds which are estimated to produce 159 million kg FCV tobacco.

Planted area was 200,000 acres with the production of 149 million kg FCV in 2018. This year transplanted tobacco has a good stand and is showing favourable signs.

USA Burley greenhouse-growing season has been good and transplants in the greenhouse are at or near maturity to transplant as of May 2019. 55,000 acres are transplanted with USA Burley and estimated production is 44.9 million kg.

US Dark Fire and Dark Air Cured transplanting are well underway across the dark growing districts in 2019. 13,125 acres area is planted with DFC seeds and estimated DFC crop size is 19 million kg. DAC plantation area is 5,090 acres and estimated crop size is 5,9 million kg for 2019.

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China

FCV production of China is projected at 1,750 million kg for 2019.

Yunnan Tobacco transplanting commenced in the first week of April throughout the entire region. Total transplanting for the entire region is completed by the end of May 2019. Large swathes of the province have been experiencing drought conditions in the main tobacco growing regions and prompting CNTC to initiate implementation of counter drought resistance measures. The adverse weather conditions will certainly have an impact on the transplanting progress however CNTC prepare additional seedlings in advance to accommodate losses of seedling mortality.

Guizhou Tobacco transplanting commenced in early April throughout the entire region and was completed by the end of May. Throughout April, numerous regions of Guizhou received an abundance of rainfall in varying degrees, with some areas experiencing extreme weather conditions with excessive rainfall and sporadic hail storms. However, this has had little to no impact on transplanting to date. Leaf resorting for the export market was completed on the 28th April, whilst processing for the export market has been extended to the end of May or early June 2019, due to larger than expected demand from international customers. Domestic supply was completed by the first week of April.

Burley tobacco crop size is projected at 50 million kg for 2019.

India

Indian Tobacco Board announced that the estimated crop size is 308.35 Million kg for 2019.

FCV Mysore crop size is projected at 100 million kg which is planted in 65,000 hectares. This year, plantation progress is affected by insufficient rain falls. As of June 2019, 70% of plantation has been completed which was 95% in June 2018. Despite insufficient rainfalls, forecasts show that FCV Mysore production will be increased by 15% in 2019 against last year.

FCV NLS crop size is estimated at 46 million kg for 2019. As of June 2019, 9,04 million kg are marketed an average price of USD 2.11 which is 2.8% lower than the previous year.

FCV SLS crop estimation is 38 million kg for 2019. 13.28 million kg are already sold with an average price of USD 1.98 which is 3.4% cheaper than last year due to an increase of lower grade product supply.

Air Cured Vinukonda Burley crop size is 26 million kg for 2019. Almost 90% percent of 2019 crops are already marketed with an average price of USD 1.14.
HDBRG Burley estimated crop production is 25 million kg for 2019. As of May 2019, purchases are in slow progress. 16 million kg plant position HDBRG Burley are purchased with an average price of USD 0.82.

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Indonesia

Estimations show that all type of tobacco production (FCV, Suncured, DFC, Besuki Na oogst) will continue to increase more than 200 million kg in Indonesia.

FCV Lombok crop size estimation is increased to 35,000 tons for 2019. Previous year total production was 33,500 tons. Tobacco production is enlarged in Indonesia due to better tobacco land utilization.
Buying plan of all cigar operators in Jember that reported to Government as 5 million kg while production is estimated around 4.2 million kg.

Although there is an increment in estimation because of good seasons, there is still a deficit due to lack of supply of providing facilities and prices of some production inputs also cannot be reached by farmers. Therefore, some farmers switch to other commodities that caused the price is still high.

Last year top grade cigar leaf buying prices from farmers per kg is US$7 – US$9 while now it has reached US$ 12 – US$15 /Kg.

Malawi

Malawi’s Tobacco Control Commission announced that this year’s Burley tobacco crop volume, at about 206 million kg, is broadly similar to that of last season with an average price of USD 1.60 per kg.

As of May 2019, Sales performance has been affected by the high rejection rate. At one point, it reached 70 percent but now it has improved and standing at 30 percent. Major Tobacco market demand stands at 151 million kg which means 25% oversupplied Malawi Burley may lead to decrease in the prices.

The country realized USD336 million in 2018 marketing season with the sale of 202 million kg Malawi Burley.

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Zimbabwe

FCV production is reached 234 million kg for 2019 which is 40 million kg more than the previous year. 90% of the crop was already purchased by major customers with an average price of USD 1.90.

Result of the high inflation rate and devaluation on local currency, prices are lower than the previous year. Tobacco farmers have expressed displeasure at the low prices being offered for the crop at the auction floors and pleaded with Parliament for help. If the government cannot solve the problems, we may see a decrease in FCV production of Zimbabwe for the next season.

Oriental Tobacco

Oriental tobacco crop size is calculated as 185.5 million kg in whole over the world in 2018.

Production of oriental tobacco is reached 60.5 million kg in Turkey which is generating 32% of global production in 2018. Previous year production was 51 million kg. Instability in Turkish Liras may lead to competitive prices as major companies already sign their purchase contracts with farmers according to local currency, for 2019 crop.

Greece is thought to have grown about 22 million kg of classical Oriental tobacco in 2018, made up of about 13.7 million kg of Basma and about 8.3 million kg of Katerini.

In Macedonia, oriental tobacco production was decreased to 21 million kg in 2018, which was 28 million kg in 2017.

Oriental tobacco production is still declining in Bulgaria. Crop size is calculated as 9 million kg in 2018.

Oriental Tobacco Illustration