Tobacco Asia

54 tobaccoasia Issue 6, 2022 November / December By Ivan Genov, ITGA Manager, Tobacco Industry Analysis The International Tobacco Growers' Association (ITGA), with its membership base on five continents, has the unique advantage of always being at the forefront of the crop cycle. Having finally returned to physical gatherings in August 2022 after almost three years of Covid-19 related disturbances, the Ameri- cas region was the first one to get together and discuss the pressing issues for the sector. The current tobacco growing situation in the five leading regional markets – Argentina, Brazil, Colombia, the Do- minican Republic, and the US reveal common challenges. In Argentina, where all marketing activities are done through contract, the 2021/2022 season is now over. Currently, the preparations are underway for the 2022/2023 season which will run from July 2022 to June 2023. The last two tobacco campaigns were affected by the La Niña climatic pattern, which led to anomalies, including storms. Although such events occasionally happen, this time around approximately 30% of the crop was impacted. The number of tobacco growers involved in 2021/2022 declined from 17,404 to 16,470 on annual basis. In terms of total production volumes – the 2021/2022 season ended with 91.6 million kg sold, down from 100.7 million kg the year before. Around 70% of the total production is attributed to FCV tobacco, followed by burley, which accounts for around 28% of the crop. Costs of production have skyrocketed, at around 60% for the two leading varieties. Pricing is also up, however, only at around 20%. In 2021/2022, FCV tobacco traded at just over the equivalent of US$2per kg. In Brazil, the 2022/2023 crop is already being planted. During the 2021/2022 season, more than 17,000 farmers suffered hail damage, while the main tobacco growing regions experienced prolonged drought. Historically, 5% of the crop suffers damage related to climate fluctuations. More than 603,000 people were involved during the latest season, 40,000 less than the one before. The total production quantity in 2021/2022 is 569.5 million kg, down from 628.5 million kg in 2020/2021, a drop of approxi- mately 9%. Costs of production are up by more than 25%, while pricing surpassed US$3.40 per kg for FCV and stood at around US$3.15 per kg for burley. Tobacco growing in Colombia, which not too long ago was a thriving tobacco growing market, has suffered from the rapid exit of major manufacturers. As a result, the tobacco areas stand at only 1,000 hectares, but the announced entry of a new buyer could lead to a six-fold increase in the years to 2027. The varies that will be developed are FCV and burley. Being pushed to the edge, local farmers have engaged in a pursuit of alternative solutions, one of which is cannabis growing for medicinal use, with a pilot project underway, aiming to analyse prospective costs of production, productivity, and viability of the crop. ITGA Report: Tobacco in the Americas ITGA in the Dominican Republic, August 2022.

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