Tobacco Asia

66 tobaccoasia Issue 6, 2026 November / December "The single most critical action a manufacturer can take to build long-term supply chain resilience is to forge long- term partnerships with growers through robust contract farming frameworks," he points out. "Manufacturers must fundamen- tally transition from passive commodity buyers into proactive production devel- opment partners. This requires actively supporting farmers with optimized crop varieties, modern agronomic technolo- gies, precision irrigation management, and cost-reduction practices to bolster and stabilize the agricultural base." Weather extremes "Climate change is expected to increase the frequency and intensity of weather extremes, and may amplify the impacts of El Niño and La Niña cycles, resulting in greater year-to-year variability in agri- cultural production," says Dave Hird, re- gional director, Asia, Alliance One Inter- national, a global tobacco-leaf company headquartered in Morrisville, NC. During El Niño years, many tobac- co-growing countries, such as Zimbabwe, Malawi, Zambia, and Thailand, often ex- perience hotter, drier conditions. These conditions can reduce yields, shorten crop cycles, and affect leaf quality and chemistry, Hird points out. "While mod- erate water stress can occasionally benefit tobacco, prolonged drought can signifi- cantly reduce both yield and quality." At the same time, El Niño can bring increased rainfall to other regions, including southern Brazil, Argentina, Tanzania, and India, creating challenges related to excess moisture. These conditions increase disease pressure, delay harvesting and curing, and negatively affect leaf color, chemistry and overall quality. "From an industry perspec- tive, the greatest challenge is not necessarily total supply, but increasing inconsistency between crops, seasons and sourcing origins," adds Hird. During La Niña cycles, these patterns often shift, with increased rainfall typically occurring in regions such as Southeast Asia and parts of southern Africa. However, the timing and severity of these impacts can vary depending on the strength and duration of the La Niña event. As climate change continues to influence growing conditions, Hird and his team expect greater annual variability in leaf quality, chemistry, and uni- formity. "There will still be years of exceptional production, but the swings between surplus and deficit years are likely to become more pronounced, particularly during strong El Niño or La Niña events." Smallholder farmers are especially vulnerable because they often have limited ac- cess to irrigation, mechanization, crop insurance, and financing. Recognizing these chal- lenges, "our company is investing in practical, cost-effective agronomic solutions that help farmers build resilience and adapt to changing conditions," Hird says. "Ultimately, climate change is expected to make agricultural production more variable. Yields will fluctuate more frequently, and key quality characteristics for tobacco will become less predictable. Supply chains like ours that invest in climate-resilient seed varieties, efficient irrigation, improved soil health, farmer training and diversified sourcing networks will be best positioned to maintain consistent quality and continuity of supply." The future Looking ahead, Firstandika predicts that the types, volumes, and geographical sources of tobacco leaf procurement will inevitably decline if overall demand decreases. "How- ever, certain specialty tobacco varieties from specific regions may remain relatively unaffected if they are developed toward distinctive quality characteristics that can only be achieved in those particular areas. This regional uniqueness could provide a com- petitive advantage and help maintain demand for specific types of tobacco." One potentially counterintuitive development is that declining tobacco con- sumption may not necessarily make leaf procurement easier. In fact, lower demand could render the supply chain more fragile. As manufacturers require less leaf, some farmers may conclude that tobacco no longer generates sufficient or predictable re- turns and shift acreage to other crops. Processing facilities, curing operations and other supporting infrastructure could also become less economical as volumes decline. The result could be a supply base that contracts faster than demand itself. Manu- facturers might consequently find themselves competing for a smaller pool of growers capable of producing particular varieties and grades, especially those needed for premium or highly standardized blends. This could also change the economics of procurement. Rather than concentrating purchases among the lowest-cost sources, manufacturers may increasingly have to pay a premium to preserve strategically important growing regions, maintain specialized farmer expertise and keep critical processing capacity viable. Over time, leaf inventories could therefore become less of a working-capital burden and more of a form of supply-chain insurance. Manufacturers may deliberately carry larger reserves of difficult-to-replace grades, diversify sourcing even when doing so increases near-term costs, and identify critical leaf varieties for which maintaining redundant sources be- comes more important than achieving the lowest possible purchase price. Another long-term risk is diminishing crop diversity. As marginal growing re- gions disappear, commercially valuable tobacco varieties could vanish with them, re- ducing manufacturers' future blending options and potentially leaving remaining crops more vulnerable to diseases, pests and changing environmental conditions. Firstandika says he remains convinced that companies should establish partner- ships with farmers to provide greater price certainty for tobacco leaves and offer financ- ing or assistance for the development of post-harvest infrastructure. "This would help maintain a stable supply, improve quality control, and encourage farmers to remain in- terested in cultivating tobacco. Companies that do not make such investments may face unstable supplies, which can ultimately lead to declining product quality." Nattapong Sumranjai, director of the leaf department, Tobacco Authority of Thailand (TOAT). Credit: TOAT.

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