Argentina

The FCV crop size of Salta is calculated at 34 million Kgs. FCV production lost over 3 million Kgs due to severe hail storms in the province of Salta. In the province of Jujuy, FCV production has reached 30 million Kgs. It was a good year in terms of FCV quality with orange to intense orange color and the crops have a very good maturity level.

The 2020 Burley crop size has reached 36 million Kgs, of which 30 million Kgs is produced by the province of Misiones. Despite the global trend of decline in the Tobacco sector, farmers in Misiones completed four consecutive harvests with similar numbers in terms of Burley production volume. The quality of the tobacco can be classified as fair to average. Due to the devaluation of the Argentine Peso coupled with high inflation rates in the country, defined prices for the 2020 crop in Pesos represents a 59% increase in the province of Misiones.

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Bangladesh

The 2020 Burley crop size is calculated at 24 million Kgs, 18 million Kgs of this crop is produced in the Rangpur region and the remaining 6 million Kgs is being produced in the Manikganj Region. The Rangpur and Manikganj Burley crop quality is identified as being above average. This is predominantly due to the favorable growing conditions and satisfactory curing to date. It is reported that there is strong competition amongst Tobacco merchants, with an anticipated increase in green prices across all stalk positions.

The FCV crop size is calculated at 85 million Kgs which is 10% less than the previous year. The quality of the Tobacco can be classified as fair to average.
The crop size decrease is primarily centered on an intentional reduction due to a high stock duration held by major local manufacturers. Due to the excess stocks from the previous year, there will be an increase in export availability, particularly in regards to filler grades.

Brazil

The 2020 FCV crop size is calculated at 550 million Kgs. This year’s crop is negatively affected from drought weather. As a result of this, nicotine levels have gone up to 5%. Most of the lugs and cutters are used in leaf grades in order to decrease nicotine levels of the blends. Authorities are expecting a lack of filler grades supply for the export market.

The Burley crop size is calculated at 55 million Kgs in 2020. Field productivity has been hampered by drought conditions. However, the quality of the Tobacco can be classified as fair to average with color ranging from tan to buff trend. Note that the Brazilian Burley crop is now at 50% of its all-time high of 110 million Kgs per annum, some 6 to 7 years ago.

Due to the pandemic restrictions, buyers could not travel to Brazil in order to make inspections, which slowed down the sales of Tobacco products substantially. Moreover, the Brazilian Real has lost almost 30% of its value since the beginning of 2020. Farmers are negatively affected by the devaluation of the Real.

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China

CNTC has completed topping operations for the 2020 Crop. The expected FCV crop size is estimated at 1,743 million Kgs. Harvesting of lower stalk tobaccos has commenced in South China growing areas. North China’s growing areas are yet to commence harvesting operations. South China’s growing areas have experienced erratic and excessive rainfall distribution during the growing season. Consequently, reports have suggested some occurrences of uneven growth, diseases, and pest infestations. However, Chinese researchers have developed a testing strip for the rapid detection of Tobacco bacterial wilt, a major plant disease, according to the Chinese Academy of Agricultural Sciences.

Since China was in lockdown at the beginning of the year, GLTs needed to work at full capacity in the spring and summer seasons in order to complete the threshing processes of the 2019 crop. Processing of the 2019 crop is completed in North China for both domestic and export requirements. While export processing is still ongoing in Yunnan and Sichuan provinces (please be advised that export quota is fixed at 20% for the 2019 FCV Crop). Characteristics of the 2019 crop are that it is less bodied and less mature compared to the previous year as a result of excessive rainfalls over the growing regions.
Burley harvesting operations have been completed and the estimated crop size is 5 million Kgs in 2020. Early reports indicate good crop development and quality.

China still has a good amount of old domestic Tobacco stocks and the Industry is continually releasing these stocks for sale in the export market.
State Tobacco Monopoly Administration (STMA) is continually emphasizing to CNTC to reduce the nicotine levels in the upcoming season. Moreover, STMA is encouraging CNTC to adopt eco-friendly curing methods.

India

The 2020 India Mysore crop size is anticipated at 92 million Kgs. The quality of the Tobacco is reported as predominantly mature to ripe styles. The entire crop had been harvested and cured. Auction floors have commenced leaf marketing and sales as of the first week of October.
The India Tobacco Board has authorized a 2020 Traditional FCV crop size of 90 million Kgs. However, the crop size is estimated at 96 million Kgs. A final grade spread resulted in 20 million Kgs of Bright, 25 million Kgs of Medium, and 51 million Kgs of Low style Tobacco. Most part of the crop is purchased by merchants with an average price of USD 1.80 / Kg.

The NLS 2020 crop size is calculated at 41 million Kgs. Auctions are currently in progress and 37 million Kgs have been marketed as of the 1st of October with an average selling price of USD 2.05 / Kg, which is 5% higher than that of last year.

The Vinukonda Burley crop size is calculated at 32 million Kgs in 2020. The entire crop has been harvested and the quality of the Tobacco is good due to the good rainfall during the growing period. The crop size is 20% higher than the previous year. The average buying price is USD 1.07 / Kg at the auction floors.

The 2020 HDBRG Burley crop harvesting and curing have been completed. The crop size is calculated at 32 million Kgs, of which 90% of the crop has already been purchased by the merchants. Early deliveries have been characterized as good, owed to widespread rainfall received during the growing season. The average buying price from the farmers was USD 0.85 / Kg in 2020.

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Indonesia

The total Tobacco production (all varieties) has been estimated at 185 million Kgs. The total crop is 10% less than the previous year due to excessive rainfalls and high wind during the plantation period.

The FCV Lombok production is estimated at 31 million Kgs which was planted on 15,700 Ha. The quality of the Tobacco can be classified as above average. Local manufacturers still have good amounts of Tobacco inventory from the previous year and this is the main reason driving a 20% volume decrease on the FCV Lombok crop in 2020.

The FCV Bojonegoro production has reached up to 13.8 million Kgs which was planted on 11,210 Ha in 18 different districts.

East Java has experienced excessive rainfalls during 2020 which has decreased the total output of Air and Sun cured varieties. The total production of Jatim, Maduro, and Kasturi style Tobaccos is calculated at 84 million Kgs.
DAC type Tobacco production remained stable in Indonesia. Production of Besuki Nota is calculated at 3.3 million Kgs and the production of Besuki Na Ougst is 2 million Kgs.
National Tobacco demand to produce an annual estimated demand of 360 Billion cigarettes in Indonesia has reached a Tobacco requirement of 300 million Kgs. Therefore, domestic Tobacco production still cannot match the demand of the domestic cigarette industry. Indonesian manufacturers mainly import FCV and Oriental type Tobaccos from various global origins.

Malawi

The Malawi Tobacco Control Commission has conducted their third and final round of crop assessments and has revised the 2020 Burley crop size to 89 million Kgs which is 35% less than the crop of the previous year. This is slightly more than the lowest Burley crop produced in the last 10 years of 70 million Kgs. Planting rains were received across the country in early December, with overall cumulative national rainfall were above historical averages. High rainfalls continued through February and into March. Due to high levels of rainfall, crop stands are slightly uneven and the tobacco leaves are thinner than the previous year. Tobacco sales have been affected by an increase in rejection rates both in Auction and Contract floors.
This year, for the first time ever, the Tobacco grown under contracts were rejected by the companies. However, even though the quality of Tobacco is lower than in previous years, prices rose up around 10% due to the significant decrease in the crop size. Tobacco growers have complained that even with extension services, the process of growing a crop was not entirely supported during the Covid-19 outbreak which created additional difficulties.

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Oriental Tobacco

Turkey: Turkish Oriental Tobacco production has reached 68 million Kgs in 2019. Izmir volume has increased compared to the previous year. A surge in interest for Basma increased the volume for 2019 but the spike is predicted to be temporary. Overall quality is better for Izmir and, for the other varieties, the quality is similar compared to the crop of 2018. The Ministry of Agriculture and Forestry initiated an idea to regulate Turkish Tobacco use in cigarettes produced for the Turkish market by the local manufacturers.
The goal is to replace the part of imported tobaccos with that of Turkish origin in order to have a better Trade balance. (This is an unlikely scheme given that the local annual cigarette consumption is estimated at 120 Bn cigarettes requiring an annual Tobacco requirement of 96,000 Tons). The Turkish oriental crop size of 2020 is estimated at 60,000 Tons, currently mostly destined for export. Very little FCV and no Burley Tobaccos are produced in Turkey.

North Macedonia: Overall production remained stable and the Oriental Tobacco crop size is calculated at 26 million Kgs in 2019. The quality of the Tobacco is slightly better than the crop of 2018. Current subsidies are seen to remain in the near term. Currently, the Government is preparing a “Tobacco Strategy Program” for the next 7 years. The crop size of 2020 is expected to be 10% lower than the previous year.
Greece: Oriental tobacco production is calculated at 20 million Kgs in 2019, made up of approximately 15 million Kgs of Basma and 5 million Kgs of Keterini.

The overall quality is better than the crop of 2018, especially the Basma variety, where the crop of 2018 was very low quality comparing the previous years. Research shows that the crop size will be 15% lower in 2020.

Bulgaria: The total crop size is calculated at 5.2 million Kgs in Bulgaria in 2019. The quality of the crop is slightly better than the previous year. The same crop size is anticipated for 2020.

Tanzania

The 2020 FCV crop size is anticipated at 34 million Kgs which is 40% less than the previous year. Excessive rainfalls during the transplanting season have been the major reason for the reduction of the crop size. Moreover, one of the largest Tobacco producers in Tanzania decided to stop its operations in 2020 which also has affected production. The overall quality of the Tobacco can be classified as above average. The crop is soft, ripe, and medium to heavy-bodied. Fertilizer split applications due to the heavy rains have helped to most of the farmers in order to achieve desired crop styles.

The DFC crop size is estimated at 1 million Kgs in Tanzania. The quality of the Tobacco is above average and heavy-bodied. Nicotine levels are higher than in previous years.

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USA

The 2020 FCV crop topping operations concluded in August, with harvesting having commenced and ongoing throughout all growing regions. The 2020 FCV crop size is anticipated as 114 million Kgs. Following a wet and cool transplanting season, excessive heat and dry weather conditions throughout July have had a detrimental effect on the crop in all growing areas. Unfavorable weather conditions significantly reduced quality and anticipated crop volume. To date, delivered Tobacco can be classified as fair to poor in color and quality.

The USA Burley crop size is estimated at 31 million Kgs in 2020. Excessive rainfalls in the western areas of the growing region have resulted in crop losses. Harvesting commenced in August and will continue throughout October across the entire growing region. The US government has banned the import of Tobacco from Malawi which may have a positive impact on Tobacco growers in the USA. The United States imported 6.8 million kilos of Malawi burley during 2019.

The DFC crop size is anticipated at 15 million Kgs and the DAC crop size is anticipated at 4.5 million Kgs in 2020. To date, crop development has been reported as good. There have been a few cases of Angular Leaf Spot disease reported in some areas, but not as severe as last year. Rainfall has been scattered with the majority of the growing areas having received sufficient rainfall during the growing season. Only the Western Kentucky region has suffered a 5% crop loss in early July as a result of excessive rainfalls. Growers who are employing H2-A labors, are starting to have labor issues due to immigration delays caused by the pandemic.

Zimbabwe

The Zimbabwe FCV crop size is anticipated at 185 million Kgs in 2020 which is 27% lower than the previous year. A drop in volume and quality has been driven by droughty conditions experienced in many growing areas during the latter part of the crop. It appears that the effects of the drought in certain growing areas had been underestimated by the authorities. As sales now come to a closure, all contracted sales are anticipated to be finalized by the middle of October. Demand was strong across all styles especially in the latter part of the selling season as the result of a smaller crop size than that anticipated and the effect on price which increased up to 20% year on year. Zimbabwe’s Tobacco growers will only receive 50% of the sales revenue in US$ and the remaining share of the revenue is paid in the domestic currency.

The Zimbabwean Government announced that international flights have re-started as of the 1st of October.

Gokhan Akca
Leaf Operations Supervisor