Tuesday, March 29, 2011

How much flue-cured was contracted? A preliminary assessment

Blake Brown, North Carolina Extension ag economist, wrote in a "U.S. Flue-Cured Tobacco Update" earlier this month that traditional buyers have completed contracts with growers. "As anticipated, some buyers increased intentions and some held intentions at 2010 levels," he said. "Unfortunately, at least one buyer decreased intentions. Consequently, the net change in contracted pounds from 2010 is difficult to gauge." The most likely scenario seems to be that contracted pounds were up perhaps 10 million pounds, he said. It might have been more but a larger than expected Brazilian flue-cured crop dampened demand for US tobacco. According to early reports, the 2011 Brazil flue-cured crop was up 200 million pounds from the 1.3 billion pounds that was expected. This likely would have displaced more U.S. flue-cured in 2011 than it did, but the Brazil crop is reportedly not the best quality, and exchange rates still favor U.S. products over Brazilian ones.For more details from this very informative report, go to the Tobacco Growers Information Portal. (www.ncsu.edu/project/tobaccoportal).

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