Government sets new buying prices for tobacco leaf

MANILA, Philippines - The National Tobacco Administration (NTA) would set next month the new buying prices for various tobacco leaf grades that would be used for trading years 2016 to 2017.

Consultations for the adjustment of tobacco floor prices officially started with the pre-tripartite consultative conference with tobacco farmer leaders from various tobacco-growing provinces in Candon City last week.

This was in preparation for the tripartite consultative conference that would be held from Sept. 29 to 30 at the NTA Central Office in Quezon City.

The biennial tripartite conference serves as a venue for the review and adjustment of floor prices of tobacco types (Virginia, Burley and native) and sub-types (neutral/filler and topped).

NTA regulation department manager Maybelen Dictaan said farmers are expected to get a fair income by maintaining a reasonable profit of 25 percent from their produce.

During the pre-tripartite conference, Dictaan said the farmers were able to come up with their consolidated cost of production, which they would present at the negotiating table in the tripartite conference proper next month.

Among those that were considered in the deliberation were the cost of materials of fertilizers and pesticides, labor (seedbed preparation, seedling care and field activities) and other expenditures (sticks, depreciation cost, interests, and land rental).

“The tobacco buying firms will review this cost of production from the farmers, the same way that the farmers will also review those that come from the private firms,” Dictaan said.

The cost of production, however, is only one of the factors and conditions to be considered in setting floor prices, she noted.

Other factors considered were the prevailing world market conditions, reasonable margin of profit for farmers, dealers, and exporters, and the quality of tobacco.

The last tobacco tripartite conference was held in 2013.

 The current floor prices for the highest grade of each tobacco type are P78 per kilogram for Virginia, P61 per kg for Burley, and P66 per kg for native type.

The imposition of higher excise taxes on tobacco products was also taken into consideration in the adjustment of the buying rates.