situation and perspectives for the eu tobacco sector orlando astuti director - fetratab managing...
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Situation and perspectives for the EU tobacco sector
Orlando Astuti Director - Fetratab Managing Director - Deltafina SpA
UNITAB 30th CongressMainz – October 16-18, 2006
0
1,000
2,000
3,000
4,000
5,000
6,000
Bill
ion
sti
cks
Year
China
Others
Cigarette World Production
Cigarette World Production2005 vs 2004
Country Billion sticks Country Billion sticks
China + 68 Japan - 24Russia + 23 S. Korea - 17Indonesia + 12 U.K. - 12Ukraine + 11 Italy - 11Egypt + 8 Netherlands - 10Vietnam + 8 Turkey - 7
Cigarette World ProductionBreakdown by Manufacturers Group
44.8% 44.4% 45.8% 47.2%
30.3% 31.1% 32.1% 32.8%
24.9% 24.5% 22.1% 20.0%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2002 2003 2004 2005
Others
CNTC
Major Multinationals
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
000
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s
Crop
Orientals
Burley
Flue Cured
Tobacco World Production
Note: Orientals data are one crop back
0
1,000
2,000
3,000
4,000
5,000
000
tons
Crop
Tobacco World Production – Flue Cured
0
200
400
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1,200
1,400
1,600
1,800
000
ton
s
Crop
Flue Cured Production – Exporting Countries
Production reduction in Brazil - 63 million kg
Production reduction in Greece - 45 million kg
Production reduction in Zimbabwe - 15 million kg
Production reduction in other African origins - 16 million kg
Production reduction in Canada -13 million kg
Production reduction in Argentina - 10 million kg
Production increase in USA + 27 million kg
Production increase in Bangladesh + 7 million kg
Others - 4 million kg
Total Production Reduction - 132 million kg
Flue Cured Production – Exporting CountriesCrop 2006 vs. 2005
World Unsold Stocks - Flue-Cured (on June 30)
81
71
113
57
98
54
80
22
75
4
63
21
102
26
151
187
0
20
40
60
80
100
120
140
160
180
200
Mil
lio
n s
trip
s k
g
1998 1999 2000 2001 2002 2003 2004 2005 2006
CCC
US Pool
Exporters
0
200
400
600
800
1,000
1,200
000
tons
Crop
Tobacco World Production – Burley
Burley Production – Exporting Countries
0
20
40
60
80
100
120
140
160
Mil
lion
str
ips
kg
2004 2005 2006E 2007P
Crop
Zambia
Mozambique
PRC
Thailand
Italy
Argentina
US
Brazil
Malawi
World Unsold Stocks - Burley (on June 30)
23
49
26
55
28
114
21
33
24
37
25
24
52
34
8572
0
20
40
60
80
100
120
140
160
Mil
lio
n st
rip
s k
g
1998 1999 2000 2001 2002 2003 2004 2005 2006
CCC
US POOL
Exporters
0
100
200
300
400
500
600
700
800
900
000
ton
s
Crop
Tobacco World Production – Oriental
World Unsold Stocks - Orientals (on June 30)
68
428
53
522
65
432
52
480
52
258
49
310
0
100
200
300
400
500
600
Mil
lion
str
ips
kg
2001 2002 2003 2004 2005 2006
Turkey
Others exporters
European tobacco:
transition towards .......what future?
UNITAB 30th CongressMainz – October 16-18, 2006
European tobacco:
between market and subsidies
UNITAB 30th CongressMainz – October 16-18, 2006
Trends in world tobacco
• towards concentration• or towards diversification
UNITAB 30th CongressMainz – October 16-18, 2006
Trends in world tobacco (continued)
• towards a commodity market• or towards a quality oriented
market
UNITAB 30th CongressMainz – October 16-18, 2006
A broader definition of tobacco “total quality”:
• certified and approved seeds• GMO-free• GAP-IPM• NTRM-free• CPA’s control• full traceability
UNITAB 30th CongressMainz – October 16-18, 2006
Sources diversification and new quality standards:
two trends that may help EU tobaccos;two challenges that EU tobacco can win
UNITAB 30th CongressMainz – October 16-18, 2006
EU subsidies:
the pre-requisite to allow EU tobacco to compete in the international markets, by alleviating the huge labor costs differential.
UNITAB 30th CongressMainz – October 16-18, 2006
Additional resources for farmers and processors shall come from:
• Better average quality, i.e. higher prices
• Higher coupled subsidy through volume reduction (without going too far)
• Better remuneration for the new quality standards
• Cost reduction in the whole chain
UNITAB 30th CongressMainz – October 16-18, 2006
Stable volumes and long-term future:
This is the request from manufacturers and the requisite for investments.
UNITAB 30th CongressMainz – October 16-18, 2006
And finally, let’s talk about politics!
Towards a renewed alliance to fight together the battle for our future
UNITAB 30th CongressMainz – October 16-18, 2006