Tobacco Asia

Volume 18, Number 3

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62 tobaccoasia weather destroyed some greenhouses in eastern N.C. this spring and adversely affected turnout in many greenhouses." In late April there were still reports of farmers seeding greenhouses [again] in an attempt to raise transplants for the 2014 crop. "How much, if any, US flue-cured acreage in- creases in 2014 seems uncertain and a significant concern of many in the industry," Brown said. But the price outlook seems good. "Unless acreage is up much more than expected or a poor growing season damages crop quality, prices for the 2014 season will remain strong, although probably not as strong as in the 2013 season. USDA estimated the average price per pound for US flue-cured tobacco at US$2.115 for the 2013 marketing year. Trends at the Manufactured Product Level Cigarette consumption in developed regions such as the US and EU continues to decline, said Blake. "Growth in cigarette consumption is expected to continue in China and other Southeast Asia mar- kets," he said. "In particular, Chinese demand for flavor-style tobacco, such as US tobacco, has grown in recent years as Chinese cigarette makers try to meet the demand for cigarettes from a more affluent consumer." "That works in favor of US leaf," Brown said. "As demand for US tobacco from US and EU cig- arette manufacturers declines, growth in Chinese demand has partially offset the decline." Still to be deduced is the impact of e-cigarettes. While total US sales of e-cigarettes (about US$2 billion in 2013) are still small relative to sales of traditional cigarettes (about US$108 billion in 2013), growth in e-cigarettes has been explosive with all major manufacturers of traditional ciga- rettes now selling them. One big question will be how this product is regulated. For now, FDA is treating e-cigarettes as a tobacco product and is developing regulations for e-cigarettes. States and local governments are beginning to enact taxes and restrictions on use of e-cigarettes in public places. Emerging regulations and taxes will significantly affect future growth in this market. Growth in e-cigarettes and other non-combustible tobacco products will come at the expense of the current market for traditional cigarettes. While the effects at the tobacco farm level may not be felt for several years, ultimately most if not all of these new products will require less tobacco than traditional cigarettes. Report From Ontario Transplanting in Canada got going in earnest in late May, said a crop consultant in Tillsonburg. "We were about a week behind schedule," he said. "The weather was cold and cloudy, and we had more than our fair share of precipitation. Transplant quality and supply seem to really be quite good." He didn't see any of the problems with plants that so many American flue-cured growers expe- rienced: "Over 95% of the greenhouses here have furnaces, so our plants are nice, but expensive." Ontario flue-cured growers, who account for nearly all tobacco grown in Canada, signed pro- duction contracts that are about 9% below con- tracted production in 2013 but which might still come close to 2013's actual production. Licenses were issued to 241 growers – two fewer than last year – for total plantings of some 21,000 acres. The projected yield is 57 million lbs, slightly more than the actual harvest of 56.2 million lbs last year. Fred Neukamm of Aylmer, Ontario, farmer- chairman of the Tobacco Marketing Board, told the Brantford (Ontario) Expositor that this year's retraction is disappointing but no cause for alarm. "That reduction caught us a bit by surprise but the number of growers hasn't changed much," he said. "The buyers have told us any reductions are the result of normal adjustments." A very rainy spring in southern Ontario lead to considerable difficulty in land preparation. Here, the farmer's tractor is mired in mud. This flue-cured field in Alachua County, Fl., was thought to be the "oldest" field of this crop. Here, the farmer performs first plowing in late April.

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