Tobacco Asia

20 tobaccoasia Issue 6, 2022 November / December By Thomas Schmid Iqbal Lambat, c.e.o., Star Agritech, Turkey Tobacco Asia (TA): Short crops are reported from Zimbabwe, Malawi, and even Brazil. Approximately by what percentage have harvests fallen short this season in those three countries? Lambat: Zimbabwean production will be about 200,000 tons this year; that is a 20% short crop. Malawi will be approximately 35% below normal production, with a yield of about 100,000 tons of burley. And Brazil… well, the country will produce a projected 450,000 tons of FCV versus its usual target of 600,000 tons, so that's down a full quarter, or 25%. As for Brazilian burley, normal production hovers around 100,000 tons. But this year it won't be much more than 40,000 tons, a decrease of a staggering 65%. TA: Indonesian suppliers were frantically rushed buyers at the recent WT Surabaya exhibition. What's the supply situation in Indonesia? Is Indonesia running out of tobacco, too? Lambat: The Lombok crop, suitable for white cigarette production, has fallen from 55,000 tons to slightly over 20,000 tons. That's almost a 50% reduction. And the cigar style Besuki has continu- ally decreased over the past decade, from an erstwhile 100,000 tons to only 7,000 tons last year. However, sun-cured varieties such as Madura, Jatim, and Phyton have remained constant at 150,000 tons; and we expect the same this year. TA: What are the facts in India? Lambat: The Mysore crop is at 62,000 tons, down 38% from the normal yield of 100,000 tons. Other traditional crops that were harvested in March and April likewise were down at least by 30%. TA: Who is winning in this supply crisis, and who will be affected most? Lambat: The winners are mostly leaf merchants who saw this crisis looming early on and correctly interpreted it as a turning point from a "buyers' market" to a "sellers' market". Prices for unman- ufactured tobacco have risen by 30-50% com- pared to last year. There are now basically no uncommitted stocks at origin. Hardest hit will be the SMEs who have to pay a significant premium to get their hands on tobacco. TA: When will the current shortage abate? What's your prognosis and estimated timeframe? And what will need to happen? Lambat: My forecast is that this crisis will be upon us for at least the next two to three years and before demand and supply will return to equilibrium. But, Brazil already is forecasting a short crop for 2023 and it will very likely mirror 2022 numbers. Brazil and Zimbabwe dominate the supply of flavored FCV. When they sneeze, the whole world catches a cold! Dr. Noor Zaman Khan, c.e.o., Malburo Tobacco International, Indonesia/Pakistan/Malaysia TA: Pakistan's supply situation is deteriorating a lot. Why is this happening? Khan: There are two causes for the drop. As you know, Pakistan has been experiencing serious flooding, which basically drowned many crops. But, there also was the Covid pandemic, during Lots of Chatter About a Looming Tobacco Shortage As the world nosedives into its worst leaf tobacco supply crisis since 2008, Tobacco Asia asked four top executives about the situation's ramifications. Dr. Iqbal Lambat, c.e.o., Star Agritech, Turkey. Credit: Star Agritech "Brazil and Zimbabwe dominate the supply of flavored FCV. When they sneeze, the whole world catches a cold!" - Lambat

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