Export Leaders, non-U.S.
In this section, you will learn:

What basic patterns have the world tobacco export leaders exhibited in the past five years?

To which countries have these export leaders been exporting?

Brazil

Brazil has been at the top of the chart as the biggest unmanufactured tobacco exporter in the past five years. In Brazil, tobacco is grown mostly in the south; especially in one town called Santa Cruz do Sul. Brazil is known for its production of flue-cured tobacco and burley tobacco. Unlike its competitors, Turkey and Zimbabwe, overproduction of unmanufactured tobacco in the past three years has not affected Brazil, and it does not seem to have had very strong effect on Brazilian export patterns.
In 1996 and in 1997, Brazil broke records in the amount of tobacco exported especially to the United States and the European Union. It exported a record 286 million kg of tobacco, earning more than $1,000 million. Such an excellent year was due to several factors. Firstly, the weather was incredibly favorable for tobacco production. Secondly, the increase of tobacco supply in the world market benefited Brazil. Since Brazil has such low production costs, they had fewer problems in lowering their prices in order to increase exports. Brazil has especially benefited in the international market due to its low export prices due to the devaluation of the local currency, especially in the last three years.

Click here for a chart of the major countries to which Brazil exports tobacco. (World Trade Analyzer)

Turkey

Turkey tobacco production is focused on oriental tobacco. Like China and many other countries, the Turkish Government has been trying to decrease production, but such an effort has not been very successful except in the last two years (1998-1999). The increase of production from1995 until 1997 was due to the high increase in the demand of quality oriental tobacco in the market.

Especially in 1996, production increased tremendously due to the fact that quality oriental tobacco supply was lowered in many exporting countries, which increased the demand for Turkish oriental tobacco. In 1998, exporting went way down due to the rise of prices by the government. As in China, the Turkish tobacco industry is regulated by the government, and because of the high inflation in 1998 and 1999, the government decided to raise the price of tobacco. Not only that, exporting also suffered due to the decrease of tobacco consumption in the United States and also due to the economic problems in Russia, two of the main countries to which Turkey is a supplier.

Click here for a chart of the major countries to which Turkey exports tobacco. (World Trade Analyzer)

Zimbabwe

Zimbabwe’s tobacco exporting industry suffered from 1995 until 1998. Zimbabwe focuses its production mainly on flue-cured and burley tobacco. Burley tobacco production has been decreasing in Zimbabwe due to the lack of investments in the small crops managed by farmers.

Exports dropped in the 1997-98 season due to two factors. One factor was the weather, which in 1997 was very wet leaving many yields unproductive. Such weather reduced productivity and most importantly the quality of the tobacco for that season. The second and most important factor for the decrease of exports was the overproduction of unmanufactured tobacco in the world market. This not only caused exports to go down but it also caused the price of the leaf to decrease. For example, in 1998, the auction for flue-cured tobacco was at $1.26 per kilogram (a decrease of 44 percent from the previous year).

Click here for a chart of the major countries to which Zimbabawe exports tobacco. (World Trade Analyzer)

Source:
U.S. Department of Agriculture, Foreign Agriculture Service