CROP REPORT

/CROP REPORT
CROP REPORT2020-06-17T14:40:43+00:00

Argentina

85% of the FCV crop has been purchased by companies. FCV crop size of Salta estimated at 34 million kilos. FCV production lost over 3 million kilos due to severe hail storms in the province of Salta. Due to high inflation and increased production cost, farmers are demanding a 50% increase in green price. Negotiations are still kept going, FCV prices are not settled in Salta.
In the province of Jujuy, FCV production has reached 30 million kilos. It was a good year in terms of FCV quality with orange to intense orange color and a very good maturity level. However, authorities fear that part of the tobacco that hasn’t yet been delivered because of lockdown will lose quality in the meantime.

Burley crop size estimated to reach 36 million kilos in Argentina. In the province of Misiones, companies have reached an agreement on the price with the farmers. The recognized price represents a 59% increase compared to the price paid in the previous year. Deliveries commenced on the 3rd of Map; the quality of the tobacco can be classified as fair to average.

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Brazil

The 2020 FCV harvesting season has been completed in Brazil, expected crop size is 550 million kilos. This year crop is negatively affected by drought weather. As a result of these, nicotine levels have gone up to 5%. Most of the lugs and cutter grades are going to be used in leaf grades to decrease the nicotine level of the blends. Therefore, authorities are expecting a lack of filler grades supply for the export market.

Burley crop size is estimated at 60 million kilos 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.

Due to the Covid-19 virus, operations closed on the 24th of March and reopened again on the 6th of April. However, this has been done at reduced capacity, in line with government health regulations and recommendations. All operational activities (buying, processing) at this time will adhere to current government regulations to safeguard the wellbeing of employees.

USA

The 2019 FCV market concluded in November. Total crop size is calculated as 142 million kilos. The overall quality of the 2019 FCV crop can be classified as fair to average. The average buying price from farmers is USD 4.12. The growing season experienced several mitigating factors such as excessive rains during transplanting which was closely followed by record-breaking heat and dry temperatures that stressed the crop. Hereafter, hurricane Dorian caused plants to produce ethylene and as a consequence accelerated over-ripening of the upper stalk tobacco.
Contracting and grower meetings for the 2020 crop season have been delayed due to the ongoing COVID-19 virus.

The 2019 Burley market concluded in February. Crop size is calculated as 36 million kilos which are 12% less than last year. The average buying price from the farmer is USD 3.90. The season’s deliveries of early harvested tobacco exhibited good quality and color, while tobacco which was harvested later, was lower in quality and darker in color. This is predominantly due to the hot and dry weather conditions experienced during the latter part of the curing season.
US government has banned importing tobacco from Malawi which may have a positive impact on US tobacco growers. The United States imported 6.8 million kilos of Malawi Burley during 2019. Some of the US. purchases of Malawian Burley tobacco may now be replaced by the US. grown Burley.

DFC crop size is calculated as 18 million kilos and DAC crop size is calculated as 5.8 million kilos in 2019. The angular leaf has been the most widespread disease that has significantly affected a large percentage of the crop. The result of Angular leaf disease accompanied by a wetter than usual growing season has resulted in negatively effecting crop yields as well as quality. As a result of these, the crop is 25% less than last year and quality can be classified as average.

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China

CNTC has completed sowing operations for the 2020 crop season and early reports have indicated strong seedling production. The expected FCV crop size is 1,743 million kilos.

Since lockdown is over in China, GLT’s have re-opened and started packing 2019 FCV crop again for domestic and export markets. Please be advised that the export quota is 20% for the 2019 FCV Crop. Due to excessive rainfall over growing regions characteristics of 2019 crop are fewer bodies and less mature compared to the previous year.

Burley sowing operations have been completed and the expected crop size is 5 million kilos in 2020.

China still has a good amount of old domestic stocks and the industry is continually releasing these stocks for the sale in the export market.

State Tobacco Monopoly Administration (STMA) is continually emphasizing to CNTC to reduce nicotine levels in the upcoming season. Moreover, STMA is encouraging CNTC to adopt eco-friendly curing methods.

India

2019 Mysore crop size has reached 103 million kilos in India. Quality of the tobacco reported as predominantly mature to ripe style. A grade spread consisting of 16 million kilos of bright, 45 million kilos of the medium, and 42 million kilos of low style tobacco. The average price of high-quality grades has gone up by 7.45% over last year. This year, the price of high-quality grades is RS 172.89 per kg which was RS 160.90 per kg in 2018.
The tobacco board has authorized a 2020 Mysore crop size of 99 million kilos. However, harvesting might be affected by the lockdown in India which will be ended on the 3rd of May.

The India Tobacco Board has authorized a 2020 Traditional FCV crop size of 90 million kilos. However, crop size is estimated at 96 million kilos. A grade spread consisting of 20 million kilos of bright, 25 million kilos of the medium, and 51 million kilos of low style tobacco. 90% of the crop is already harvested. The average market price is USD 2.10 for this year.

Indian Tobacco Board has authorized an NLS 2020 crop size of 46 million kilos. However, a crop size 42 million kgs is anticipated which was transplanted in 17,000 hectares and 90% of the crop has been harvested. The average market price is expected to be USD 2.30 for this year.

Vinukonda Burley’s crop size is calculated as 29 million kgs in 2019. The entire crop has been harvested and the quality of the tobacco is good due to good rainfall over the growing period. Crop size is 16% more than the previous year. The average buying price from the farmers is USD 1.05.

The 2020 HDBRG crop harvesting is nearing to completion and crop size is estimated to be 35 million kgs. Early deliveries have been characterized as well owing to widespread rainfall received during the growing season. Crop size is 25% more than the previous year. Due to the increase in supply, the average buying price from the farmers has been dropped to USD 0.59 which was USD 0.85 last year.
All the tobacco operations have been suspended by the Indian government until the 3rd of May, in response to the COVID-19 virus.

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Indonesia

Total tobacco production has gone by 22% and reaches 200 million kilos in 2019. Good weather conditions have a major effect on the increase in tobacco production.

FCV Lombok production increased by 13% compared to the previous year. The average planting area reaches 25,000 Ha with a total production of 44 million kilos. The quality of the tobacco is above average.

FCV Bojonegoro production has reached 13.4 million kilos which were planted in 11,210 Ha in 18 different districts.

East Java has experienced a dry season during 2019 which increased the quality and quantity of the tobacco. The total production of Jatim, Maduro, and Kasturi style tobacco has reached 120 million kilos.

DAC type tobacco production remains stable in Indonesia. Production of Besuki Nota is calculated as 3.3 million kilos and production of Besuki Na August is 2 million kilos.

Even though tobacco production has increased in Indonesia, it is still not enough for the need of domestic cigarette industry. Indonesia is still importing FCV and Oriental type tobacco.

Malawi

Preparations for the 2020 Burley crop are ongoing, while the majority of the growers have already commenced harvesting. Planting rains were received across the country in early December, with overall cumulative national rainfall having been above historical averages. The high rainfalls have continued through February and into March. Due to high levels of rainfall, crop stands are slightly uneven and tobacco leaves are thinner than the previous year. Expected Burley crop size is 120 million kilos which are 15% lower than the previous year.
The Malawian president has declared a “state of disaster’’ in the country in response to tackling the threat of the COVID-19 virus. Industry representatives are currently negotiating the market opening date.

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Tanzania

The 2020 FCV crop size estimated at 50 million kilos which are 29% less than the previous year. One of the largest tobacco producers in Tanzania decided to stop its operations in 2020 and this decision has a major effect on this decrease. The overall quality of the tobacco can be classified as above average. The crop is soft, ripe, and medium to heavy-bodied. Limited fields were flooded as the majority of the fields were well drained and located at good gradients. Fertilizer split applications due to heavy rains helped most of the farmers to achieve desired crop styles. The buying season will start in the middle of May.

DFC crop size estimated at 1 million kilos in Tanzania. The quality of the tobacco is above average and heavy-bodied. Nicotine levels are higher than in previous years. The buying season will start at the end of June.

Tanzania is not much affected by the pandemic and operations are still ongoing as usual.

Zimbabwe

FCV production has been estimated as 225 million kilos in 2020 which is 13% lower than the previous year. The irrigated crop is down in volume compared to recent years. However, the dryland crop has exceeded the earlier forecast yields and volume is expected to be up on earlier expectations. As a result, the overall production level of commercially grown tobacco is slightly less than 2019 volumes.
Due to ongoing serious drought conditions and high temperatures over the Mashonaland growing regions, crop quality is ranging between ripe to overripe.
The Tobacco Industry and Marketing Board has announced that tobacco growers will be paid like last year. Zimbabwe’s tobacco growers will only receive 50% of the revenue in US$ the remaining share of the revenue is paid in the domestic currency. The domestic growers’ associations, growers’ and several tobacco stakeholders spent a significant portion of 2019, emphasizing the importance of the US dollars for tobacco growers. Lowering the amount, what they receive will severely impact the ability to reinvest and retool.

The government has announced a lockdown until the 22nd of April due to the COVID-19 pandemic. Moreover, even when the lockdown is over, the government has banned the gathering of more than 100 people, which will slow down the marketing activities in auction floors. 75% of the crop is still waiting to be marketed and farmers expressed their concerns that if the marketing season gets postponed, tobacco can be contaminated due to poor storing conditions in farms.

Bangladesh

The 2020 Burley crop size is calculated as 24 million kilos. Weather and growing conditions have been reported as being favorable, with satisfactory and uniform crop growth. Purchasing season was planned to start at the beginning of April, however, the government has extended the lack down until the 25th of April.

FCV crop size is anticipated as 85 million kilos which are 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 stocks from the previous year, there will be an increase in export availability, particularly in filler grades.

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Oriental Tobacco

Turkey: Turkish Oriental tobacco production has reached 68 million kilos 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 crop 2018. Ministry of Agriculture and Forestry initiated an idea to regulate Turkish tobacco use in cigarettes produced for the Turkish market by the manufacturers.

The goal is to replace the part of imported tobaccos with the Turkish origin in order to have a better trade balance. Turkish oriental crop size of 2020 estimated at 60 million kilos.

North Macedonia: Overall production remained stable and Oriental tobacco crop size is calculated as 26 million kilos in 2019 in North Macedonia. The quality of the tobacco is slightly better than crop 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 as 15 million kilos in 2019, made up of about 15 million kilos of Basma and about 5 million kilos of Katerini.
Overall quality is better than the crop of 2018, especially the Basma where crop 2018 was very low quality comparing the previous years. Researches show that the crop size will be 15% lower in 2020.

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