Philippine tobacco gears up for bigger share of global market

MANILA, Philippines - Recovering from a near collapse in the first decade of this century, the Philippine tobacco industry is moving on higher gear to capture a bigger slice of the multi-billion dollar global market for tobacco products by producing top quality leaves.

This was the pitch made by National Tobacco Administration (NTA) chief Edgardo Zaragoza to key officials in tobacco-producing provinces and towns in six regions in preparation for the launching of a co-financing program between the National Government and local government units to bankroll the growing of world-class tobacco leaves.

In the last tobacco season which also coincided with the dry months from January to May this year, Zaragoza said about 37,000 farmers from 35 towns in six regions sold 77 million kilograms of dried tobacco leaves valued at P5.05 billion.

Production more than doubled compared to last year.

A little less than one half or 40 percent of total sales was exported.

Net earning per hectare was put by the tobacco czar between P40,000 and P100,000 depending of the quality of leaves a farmer produced, making the golden leaf one of the most profitable cash crop in semi-arid, irrigation-starved farmlands in lowland areas of the country.

The target for the next cropping season is to convince up to 55,000 farmers to plant the crop and coach them to grow top quality leaves that can compare with the best in the world.

“If Pangasinan farmers can produce Isabela grade burley leaves, we can make a big difference,” Zaragoza said. Tobacco leaves produced in Isabela province in the Cagayan Valley region has gained the reputation of being one of the best in the world for blending in top-quality cigarettes and in filling quality cigar.

The Philippines once had that reputation in producing world-class cigar. But that was later taken over by Cuba when the quality of leaves grown by farmers deteriorated.

The NTA had signed co-financing agreements with local government officials in tobacco growing provinces for the latter to raise counterpart lending funds to its P200 allocation for the next cropping season.

This will be shortly followed with purchase agreements with direct exporter, Universal Leaf, and local manufacturer, Philip Morris, to assure that the farmers’ harvests will be assured of markets at profitable prices, and not fall on the trap of trader-lenders called “cowboys”.

The local market alone remains unfilled as cigarette and cigar manufacturers still imported 90 million kilos last year. – PHILEXPORT News and Features