Tobacco: U.S. exports and imports – exports of unmanufactured tobacco expected to fall for July 1990-June 1991, but U.S. exports for second half of 1991 may exceed previous year’s due to tightening world supply, increased U.S

U.S. exports and imports – exports of unmanufactured tobacco expected to fall for July 1990-June 1991, but U.S. exports for second half of 1991 may exceed previous year’s due to tightening world supply, increased U.S. trade with developing countries, shift to high-quality American blends and relative strength of foreign currencies in comparison to U.S. dollar – U.S. Dept. of Agriculture, Economic Research Service report

Exports Might Fall Slightly

For the year ending June 30, 1991, exports of unmanufactured tobacco are expected to fall a little short of 1989/90’s 485 million pounds (617 million pounds, farm sales weight). Exports will likely total between 475 and 485 million pounds for the July 1990-June 1991 period.

During July 1990-March 1991, leaf exports fell 3-1/2 percent to 365 million pounds, but average unit value rose about 3 percent. The seasonal peak in shipments to Japan, the EC, and other European countries came in late 1990 and early 1991 (table 5). However, some shipments were delayed because of the war to liberate Kuwait and others were awaiting construction of leaf storage facilities at some overseas locations.

Exports of flue-cured during July 1990-March 1991 were virtually unchanged from a year ago. Burley shipments fell about 20 percent because of short supplies and shipping delays. Kentucky-Tennessee fire-cured, Virginia fire-cured, Maryland, and blackfat also fell, while shipments of cigar kinds rose.

Both Asian and EC countries took less. Within the EC, the Federal Republic of Germany (the major importer) took more to replenish stocks. Japan purchased about the same amount. Japanese leaf demand has strengthened in recent years because a larger share of U.S. tobacco is being used in their domestic cigarette blends to compete more effectively with growing cigarette imports from the United States.

As global supplies tighten, U.S. exports for the second half of calendar 1991 might exceed those of last year, especially if the quality of the 1991 flue-cured crop is desirable. Factors that enhance export prospects include: tightening world supplies of leaf; increased U.S. trade with developing countries; the continuing shift to American blends that require more high-quality flue-cured and burley tobacco; and the relative strength of foreign currencies relative to the U.S. dollar. Factors that constrain U.S. export growth include: quotas and tariffs that discriminate against U.S. tobacco; declining cigarette consumption in major importing countries; and short U.S. supplies.

Imports Up

During July 1990-March 1991, U.S. duty paid imports of unmanufactured tobacco (for consumption) increased about 16 percent from a year earlier.(2) Imports of cigarette leaf rose 12 percent. Every category – Oriental, unstemmed flue-cured and burley, stemmed flue-cured and stemmed leaf, not specially provided for (other) – rose. Cigarette scrap and sharply.

Arrivals of tobacco (general imports) for the first 9 months (July 1990-March 1991) were up 2 percent from a year earlier. Total cigarette leaf arrivals fell despite an 11 percent increase in stemmed flue-cured leaf and a 14-percent increase in other cigarette stemmed leaf (largely burley). The overall decline occurred because Oriental leaf fell 12 percent. Oriental leaf arrivals declined because stocks had been replenished a year earlier. The boost in stemmed cigarette leaf is probably to ensure adequate supplies of cigarette leaf, since domestic supplies are tightening.

Arrivals of cigarette and cigar scrap and stems were up but unstemmed flue-cured and burley leaf and cigar leaf fell. By April 1 of this year. U.S. stocks of foreign-grown cigarette and smoking tobacco had fallen to 660 million pounds, 2 percent below a year earlier. Most of the decline occurred in Oriental, flue-cured fell slightly, and burely rose. Oriental stocks fell 5 percent and burley rose 5 percent. Cigar leaf stocks rose 18 percent.

World Flue-Cured Tobacco Production and Sales (3)

The world flue-cured tobacco crop is probably larger than last year. Production will likely be up in several of the leading producing countries but it is expected to be down in the United States, Brazil, and Canada.

Zimbabwe’s 1990/91 tobacco auctions opened April 3. Prices averaged US$1.40 per pound during the first 7 weeks of sales ending May 22, compared with US$0.93 during a similar period a year earlier. Overall, crop quality is probably similar to a year earlier. The crop is estimated at about 359 million pounds, about 22 percent above a year earlier. Auctions began in mid-April in Malawi, another major African producer, but production and sales estimates are not available.

Canadian flue-cured markets closed on March 14, 1991. The volume of flue-cured tobacco sold through the Ontario Flue-Cured Growers Marketing Board in 1990/91 totaled 123 million pounds, down 15/1/2 percent from last season. The average price was Can$1.48 (US$1.27), compared with Can$1.36 (US$1.17) a year earlier. Canadian flue-cured production will likely be down about 5 percent in 1991.

(2) Includes tobacco, manufactured or not manufactured, except smoking tobacco in retail packages; flue-cured; and tobacco, manufactured or not manufactured, not specially provided for (other). (3) Summarized from various Foreign Agricultural Service reports. (4) All quantities in this section are stated in farm-sales weight unless otherwise noted.

COPYRIGHT 1991 For more information, contact US Department of Agriculture Economic Research Service. Phone: 1-800-999-6779 (8:30-5:00 ET).

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