Tobacco Asia

tobaccoasia 49 LEAF NEWS 烟叶新闻 as assurances that long‑term policy changes will balance economic and public health goals. FAIFA warned that without adjustments, the tax regime could destabilize the tobacco economy and affect millions of livelihoods across the value chain. China Tobacco Renews Alliance One Deals China Tobacco International (HK) has extended its long‑ standing commercial arrangements with Alliance One Interna‑ tional and Alliance One Brazil, renewing a set of framework agreements that cover the sale and purchase of tobacco leaves as well as related services. The company signed new extension agreements for 2025 that will roll over the existing sales and procurement frame‑ works for another three years, from January 1, 2026 through December 31, 2028. The updated agreements also formalize additional provisions for sourcing services linked to the processing and production of tobacco leaf products. Aside from these additions, the core commercial terms and pricing policies will remain unchanged. Alliance One International and its Brazilian subsidiary qualify as connected persons at the subsidiary level because they hold a combined 49% interest in China Tabaco Interna‑ cional do Brasil Ltda (CBT). As a result, the renewed arrange‑ ments fall under the category of continuing connected transactions in line with Hong Kong listing requirements. The extensions highlight the strategic importance of the Alliance One Group within China Tobacco International (HK)'s tobacco leaf supply chain. The company continues to rely on this partnership to secure stable access to raw tobacco and sufficient processing capacity, reinforcing the operational role Alliance One plays across procurement and production activities. By locking in these agreements through the end of 2028, China Tobacco International (HK) aims to maintain con‑ tinuity in sourcing and service support while operating within an established commercial and compliance framework. The company did not revise pricing mechanisms or other major contractual conditions, signaling an intention to preserve the existing balance in its supply relationships. Relief for Karnataka Growers The Indian government has approved the sale of surplus flue‑ cured virginia (FCV) tobacco produced in Karnataka, offering relief to growers facing market pressures this season, Mysuru member of parliament Yaduveer Wadiyar said in a statement. The government relaxed elements of the Tobacco Board Act, 1975for the 2025–26 crop season to allow excess FCV tobacco — both from registered growers and unauthorized crops from unregistered farmers — to be sold through authorized Tobacco Board auction platforms. The Commerce Ministry issued a notification on December 19 stating that the decision aims to address the surplus produced this year and support growers by clearing excess stock without additional legal restrictions. FCV tobacco represents a major export and cash crop in Karnataka, traditionally auctioned through regulated channels to ensure fair pricing. Growers had faced production issues this season due to adverse weather and other challenges, leading to output that exceeded traditional marketing limits set by authori‑ ties. Allowing surplus FCV tobacco to be marketed is expected to ease financial strain on farmers and reduce stockpiling. Wadiyar, who represents the constituency that includes significant tobacco‑growing areas, welcomed the government's decision as a "necessary adjustment" to current market realities. He called the measure a positive step toward protect‑ ing farmer incomes and supporting agricultural stability. Local industry groups also praised the change, noting that the ability to sell excess tobacco without penalty should improve liquidity for growers and stabilize auction prices. Karnataka's tobacco sector has long been sensitive to fluctuations in weather, global demand, and regulatory adjustments, and farmers have repeatedly called for predictable market access. The decision builds on earlier interventions by the central government, which in past crop seasons also waived penalties on excess and unauthorized tobacco to help growers cope with low yields and market disruptions. FCV commands a significant share of India's leaf tobacco exports and generates substantial auction revenue for growers and traders alike. Allowing excess stock to be legally sold without penalties may ensure that crop cycles remain viable and that farmers can maintain livelihoods amid fluctua‑ tions in output year to year. The adjustment of the Tobacco Board Act provisions applies only for the current crop cycle, and officials said future seasons will be reviewed based on market and production patterns. China Drives Zimbabwe Tobacco Growth China's financing and market access have played a major role in the rapid expansion of Zimbabwe's tobacco sector, which has reached record production levels and has begun moving into value addition, said finance, economic development and investment promotion minister, Professor Mthuli Ncube. He made the remarks at a recent signing ceremony for Letters of Exchange under the China‑Aid Upgrading and Maintenance of Irrigation Schemes, attended by Chinese ambassador to Zimbabwe, Zhou Ding. Zimbabwe's tobacco exports earned about US$1.3 billion last year, making the crop the country's second‑largest export earner after gold. According to Ncube, small‑ and medium‑ scale farmers drove this performance, supported by Chinese‑ backed financing arrangements. "China has been a very important partner to Zimbabwe on the regeneration of the tobacco sector to a point where the sector has exceeded all expectations. Last year we produced something like 350 million kilograms of tobacco and this is the highest production ever in the history of Zimbabwe," he said. He attributed the growth to credit facilities provided through China Tobacco, which have enabled farmers to access inputs and raise production. Ncube added that China has also provided a reliable export market, linking production directly to off‑take. He noted that the partnership has helped Zimba‑ bwe remain among the world's top four tobacco producers, alongside China, Brazil, and the US. Early indications from the Ministry of Lands, Agricul‑ ture, Fisheries, Water, and Rural Development suggest output could increase further this year. "From the figures I am hearing from the Ministry of Agriculture for this year, the 350 million kilograms will be exceeded and we are closer to 400 million, if not more," Ncube said. He said cooperation with China has begun extending into beneficiation, with joint ventures emerging to process tobacco locally and manufacture cigarettes. On irrigation, Ncube said Chinese support would focus on upgrading schemes across the country to strengthen climate resilience and food security. Ambassador Zhou said the tobacco sector supports more than one million livelihoods in Zimbabwe and reaffirmed China's continued support.

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