TOBACCO YEARBOOK                                           December 17, 1997
December 1997, TBS-240
              Approved by the World Agricultural Outlook Board
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Summary

A larger 1997 U.S. tobacco crop was not enough to offset lower beginning
stocks, and total 1997/98 supply is slightly smaller than a year earlier. Total
U.S. tobacco production this year is forecast at 1.65 billion pounds, 8.5
percent above 1996 and the highest since 1992. Acreage increased 8.5 percent,
and yields fell slightly. Prices for flue-cured leaf at auction were 11.3 cents
per pound below the previous season. During the first few weeks of the burley
auctions, prices were slightly below last season. 

The 1997 flue-cured auction sales averaged $1.724 per pound, compared with
$1.837 the previous year. Although quality was better, 19 percent of the crop
went under loan. Flue-cured marketings exceeded 1 billion pounds for the first
time since 1981. Adequate world and domestic supplies, availability of foreign
leaf, and reduced domestic use and exports of cigarettes lowered prices and
increased loan takings.

Burley markets opened November 24. The short crop this year resulted in prices
close to last year's record high levels. During the first 3 weeks of burley
sales, prices averaged 1.915 per pound, and volume was down 8 percent from last
year. Burley support prices were raised 2.3 cents per pound this season. 

Production in 1998 will decrease because of smaller quotas. U.S. tobacco use
during 1997/98 will fall short of marketings and next year's beginning stocks
will increase from the 2.1 billion pounds carried into this year. 

U.S. cigarette consumption in calendar 1997 is projected down about 2.5 percent
from last year. Output is expected to fall for the first time since 1993 and is
mostly due to lower cigarette exports. Cigar consumption continued its meteoric
rise in 1997, and is projected to reach 3.6 billion cigars. Snuff consumption
rose, but chewing and pipe tobacco consumption slid in 1997. 

Exports of unmanufactured tobacco are expected to increase in calendar 1997,
reaching 520 to 540 million pounds (declared weight), compared with last year's
485.5 million pounds. Shipments through September are 11 percent above the same
period in 1996. On a farm sales weight basis, exports of 680 to 700 million
pounds are expected.

During January-September 1997, total U.S. imports for consumption (duty paid)
reached 518 million pounds, 18 percent above a year earlier. During the same
period in 1996, imports gained 54 percent over 1995. Imports continue to gain
despite abundant U.S. stocks of foreign leaf,  reduced cigarette production,
and tight world leaf supplies. Imports of cigarette leaf totaled 377 million
pounds for the 9-month period, and cigar leaf totaled 66 million pounds.
January-September arrivals of tobacco (general imports) gained 6 percent,
reaching 583 million pounds declared weight.

The supply of U.S.-grown flue-cured tobacco for 1997/98 (July-June), about 2.1
billion pounds, is up 3 percent because of larger marketings. With marketings
above indicated use, ending stocks are expected to rise 4 percent from last
year's 1.12 billion pounds.

The national (basic) flue-cured quota for 1998 was set at 807.6 million pounds,
17 percent below 1997. The effective quota (reflecting adjustments for net
under-quota marketings) is estimated at 813 million pounds, 20 percent lower
than 1997. Price supports will average $1.628, 0.7 cent higher. Basic quotas
are down because cigarette manufacturers reduced purchase intentions, and
stocks are adequate. The effective quota fell by a similar amount because 1997
marketings were close to that season's effective quota.

The supply of U.S.-grown burley tobacco for 1997/98
(October-September) is estimated at 1.33 billion pounds, 6 percent below a year
earlier. As of December 1, the 1997 crop was estimated at 563.1 million pounds.
Because of poor growing conditions and low carryin, the entire crop will likely
be sold in 1997/98.

By law, the marketing quota for burley must be announced by February 1 and
acreage allotments for several other kinds by March 1. Supplies of fire-cured
and Maryland leaf are higher, but supplies of dark air-cured and cigar tobacco
are down.

Tobacco Products

Cigarette Production, Consumption Slips

U.S. cigarette production in 1997 is expected to slip about 4 percent from
record 1996 levels to 725 billion pieces (table 1). Some U.S. production has
moved offshore, contributing to the decline. Both exports and domestic
consumption are expected down. According to Bureau of Alcohol, Tobacco, and
Firearms data, taxable removals totaled 328 billion pieces through August,
about the same as last year. Nontaxable removals gained 15 percent during the
same period.

After record cigarette exports in 1996, shipments are expected to decline
between 5 and 10 percent to 215 to 230 billion pieces, partially due to shifts
in production to overseas plants and declining consumption in some major
markets. Cigarette imports are steady at about 3 billion pieces.

Domestic consumption is expected to slide about 2.5 percent to 475 billion
pieces. The cumulative effects of higher State taxes, higher prices,
restrictions on smoking, and increased awareness of links between smoking and
disease continue to dampen demand for cigarettes.

In September, cigarette companies boosted the wholesale price for cigarettes by
$3.50 per 1,000 sticks. Wholesale prices advanced 10 percent in 1997. Six
States have raised cigarette excise taxes in 1997.

Global Tobacco Settlement and Recent Legislative Initiatives

In addition to the original settlement signed by the States' Attorneys General
and the cigarette manufacturers in June, numerous proposals were presented this
fall to address various issues surrounding the original proposal. Notably, the
effects of the proposed settlement on tobacco growers and their communities
have been addressed by numerous legislative initiatives.

Senators Ford and McCain each introduced legislation which would provide
assistance for 25 years to tobacco farmers, displaced industry workers, and
tobacco dependent-communities in response to any adverse impacts caused by the
settlement. Senator McCain's legislation incorporates the provisions of the
global tobacco settlement with the grower/community assistance in Senator
Ford's bill.

Senator Lugar has introduced legislation that terminates the federal tobacco
quota program in 1999 and phases out, over 3 years, the price support loan
program. Compensation at $8 per pound for quota owners and $1.20 per pound for
lessees would be given. Tobacco-growing States would receive $300 million in
block grants.

Senator Kennedy submitted a bill containing comprehensive provisions covering
tobacco manufacturing, marketing, distribution, and public health. The bill
offers to buy quota from owners and lessees at $4.00 per pound. The current
tobacco program would remain unaltered for growers who wished to refuse the
payments and continue to participate.

Senator Hatch has also introduced a bill containing comprehensive tobacco
manufacturing, marketing, distribution, and public health regulations. The
provisions affecting growers are similar to Senator Lugar's bill.

The outcome of the settlement and associated legislation is uncertain but will
undoubtedly affect future tobacco production, marketing, and consumption.

Cigar Consumption Continues Upward Surge

Consumption of large cigars is expected to reach nearly 3.6 billion cigars in
1997, an 18 percent gain over 1996. The increase in consumption is mostly among
imported premium brands. Imports of premium cigars are the primary source of
growth. Large cigar imports in 1997 are expected to jump 90 percent. The strong
demand is due to the glamour associated with cigar smoking. Small cigar
consumption, as indicated by domestic invoices, is expected to increase 15
percent to 1.7 billion.

Other Tobacco Products Mixed

Based on 9 months of data, production of chewing tobacco is expected to fall 9
percent, and smoking tobacco is expected to fall 4 percent. Snuff output in
calendar 1997 should increase 4 percent to 61.5 million pounds. Consumption as
indicated by invoices to domestic customers is expected to fall 9 percent for
chewing tobacco and 5 percent for smoking tobacco. Domestic invoices of snuff
are expected to gain slightly.

U.S. Exports and Imports

Leaf Exports Advance

Exports of unmanufactured tobacco (by weight) are expected to increase in
calendar 1997, reaching 520 to 540 million pounds, compared with last year's
485.5 million pounds. Shipments through September are 11 percent above the same
period in 1996. Exports of 680-700 million pounds are expected on a farm sales
weight basis. Lower prices at the flue-cured markets will make U.S. flue-cured
more competitive in the world market.

January-September 1997 exports of flue-cured, the principal export class,
gained 10 percent. Exports of burley--the second most important export class--surged 26 percent. Tight world burley supplies resulted in the gain in spite of
lower-than-expected burley production. Exports of cigar leaf surged 75 percent
during the 9-month period as cigar producing nations boosted output of premium
cigars, mostly destined for the United States. Exports of Kentucky-Tennessee
and Virginia fire-cured, blackfat, and Maryland tobacco also gained.

Among major markets, shipments to Asia and Europe, which account for the bulk
of shipments, advanced. Through September, Germany, Turkey, and Japan were the
major buyers of U.S. leaf.

Import Gains Slow

During January-September 1997, total U.S. imports for consumption (duty paid)
reached 518 million pounds, 18 percent above a year earlier. During the same
period in 1996, imports gained 54 percent over 1995. Imports continued to
increase despite abundant U.S. stocks of imported leaf, reduced cigarette
production, and tight world leaf supplies. Imports of cigarette leaf totaled
377 million pounds for the 9-month period, and cigar leaf totaled 66 million
pounds.

Imports for consumption of Oriental leaf, the major import class, rose 56
percent. Most of the other cigarette leaf categories either had slight gains or
declines. Stemmed flue-cured was advanced 11 percent; and other stemmed
cigarette leaf gained 14 percent. Cigar wrapper and filler advanced. Stems fell
by 23 percent, but leaf and scrap imports were up.

January-September arrivals of tobacco leaf (general imports) gained 6 percent
(by weight) reaching 583 million pounds. Oriental arrivals fell 8 percent and
stemmed flue-cured slid 10 percent. Other stemmed cigarette leaf, mostly
burley, advanced 33 percent. Imports of stems fell 29 percent. Cigar wrapper
and filler arrivals advanced.

U.S. stocks of foreign-grown cigarette and smoking tobacco rose over the last
12 months. On October 1, 1997, foreign cigarette leaf stocks in the United
States totaled 1.15 billion pounds (farm sales weight), 12 percent above a year
earlier. Flue-cured stocks were up 7 percent, oriental leaf gained 9 percent,
and burley stocks jumped 21 percent. Higher stocks reflect the surge in imports
during 1996. October 1 cigar stocks advanced 44 percent compared with October
1, 1996 to reach 116 million pounds.

Tariff-Rate Quota Update

The volume of tobacco imports for consumption under the tariff rate quota
(TRQ), primarily flue-cured and burley, during the period from September 13,
1997, through December 7, 1997, the latest data available, reached 75.2 million
pounds, 23 percent of the 332-million-pound quota.

U.S. Tobacco Leaf Situation and Outlook 1/

------------------
1/ All weights are farm sales weight unless otherwise noted.
------------------ 

U.S. production for 1997 is likely up 8.5 percent from a year earlier.
Effective quotas were up 8 percent for flue-cured and 22 percent for burley.
Total acreage was up 8.5 percent from a year earlier and the average yield for
all tobacco fell only slightly. Flue-cured yields gained 2 percent, but burley
yields fell 4 percent (table 9). As measured by official grades, the overall
quality of the flue-cured crop was slightly better than the 1996 crop. Burley
quality is probably down due to poor growing and curing conditions. Flue-cured
supplies are slightly larger, while burley supplies are smaller because of
reduced carryover and lower burley marketings. For other kinds, supplies of
Maryland and fire-cured are up, but supplies of dark air-cured and cigar leaf
are down.

Prices for all tobacco will not reach last year's level. Short crops during the
previous two seasons and higher price supports boosted prices for flue-cured in
1996, but this year nearly 20 percent of the flue-cured crop went under loan.
However, the expected short 1997 burley crop, the third in a row, may result in
prices nearly as high as 1996.

Marketing Quota and Allotments in 1998
The 1998 national basic quota for flue-cured tobacco is 17 percent below a year
earlier. When undermarketings and overmarketings from 1997 are added, the
effective quota (sum of individual quotas) is expected to be down 20 percent.

Marketing quotas for flue-cured and burley in 1998 are set by totaling (1)
intended purchases by domestic cigarette manufacturers from the 1998 crop; (2)
average exports for 1995/96, 1996/97, and 1997/98 marketing years; and (3) an
adjustment to maintain loan stocks at the specified reserve-stock level of 15
percent of basic quota, or a minimum of 100 million pounds of flue-cured or 50
million pounds of burley.

The five domestic cigarette manufacturers (each with more than 1 percent of
U.S. production and sales) are required to submit a statement of flue-cured and
burley purchase intentions to the Secretary of Agriculture 15 days before the
national quota announcement deadline. Intended purchases of flue-cured in 1998
total 455 million pounds, down 15 percent from last year's high level. Burley
purchase intentions are due by January 15, 1998.

For the 1998 flue-cured marketing quota, the three-component formula total is
784.1 million pounds, 19.5 percent below last year's quota. U.S. Department of
Agriculture (USDA) used its discretion to increase the 1998/99 quota total by 3
percent. The 1998 quota was set at 807.6 million pounds, compared with 973.8
million pounds in 1997. The national acreage allotment was set at 386,782
acres, also 17 percent below 1997.

By February 1, USDA will announce the 1998 burley poundage quota. This season,
flue-cured and burley growers vote in January and late February, respectively,
in two referenda for or against marketing quotas on their next three crops. By
March 1, USDA will announce the 1998 acreage allotments for other kinds of
tobacco under the production control program. Shortly after that announcement,
growers of Maryland, Virginia sun-cured, Pennsylvania filler, and Connecticut
Valley binder kinds will vote in separate referenda for or against marketing
quotas on their next three crops. In previous referenda, growers of
fire-cured, dark air-cured, and Virginia sun-cured approved marketing quotas
applicable to the 1998 crop.

Growers of Maryland, Pennsylvania filler, and Connecticut and Massachusetts
binder turned down marketing quotas in their last referenda (1995), so
government price support is not available for their 1997 crops. Pennsylvania
filler has never had marketing quotas. For Maryland, quotas last applied to the
1965 crop, and for Connecticut and Massachusetts binder, quotas last applied in
1983.

Price Supports in 1998

USDA has set the 1998 flue-cured support at $1.628, 0.7 cent above 1997. The
1998 price support for flue-cured and burley (to be announced later) is the
preceding year's support adjusted by changes in the 5-year moving average of
prices, excluding the highest and lowest years (two-thirds weight) and changes
in a cost-of-production index (one-third weight). Costs include variable
expenditures, but exclude costs of land, quota, risk, overhead, management,
marketing contributions, and other items not directly related to tobacco
production.

The Secretary of Agriculture has discretionary authority to adjust the price
support between 65 and 100 percent of the calculated increase or decrease. The
5-year moving average of prices and changes in a cost-of-production index
increased the price support for flue-cured. The 1998 flue-cured support was
raised by 100 percent of the formula increase. Price supports for other types
of tobacco have not been set for 1998.

For types other than flue-cured and burley, maximum increases in supports will
continue to be based on changes in the average parity index during the 3
previous years compared with 1959. But loan associations can request reduced
support if market conditions warrant.

For the 1998 flue-cured price support calculation (omitting high and low
years), the 1993-97 prices averaged 173.9 cents a pound, the same as the 1992-96 average. Using 10-year average yields to minimize the effects of weather,
the cost of production in 1997 is estimated to have increased 2.5 cents per
pound. The weighted average of the price increase and cost decrease was 0.7
cent.

The marketing assessment under the Omnibus Budget Reconciliation Act of 1990
will total 1.628 cents per pound (divided equally between growers and buyers
for the 1998 crop of flue-cured tobacco). Importers of flue-cured tobacco will
be assessed the full 1.628 cents per pound for imported tobacco. The marketing
assessments for other kinds and no-net-cost assessments for all kinds will be
announced later.

U.S. Industry Buys 402 Million Pounds of Burley

U.S. cigarette manufacturers bought 402.4 million pounds (farm sales weight) of
burley tobacco during the 1996 marketing season, October 1, 1996 through
September 30, 1997. Manufacturers' purchase intentions for the 1996 crop were
424 million pounds. Actual purchases were 95 percent of intended purchases.

U.S. Industry To Buy 455 Million Pounds of 1998 Flue-cured Tobacco

U.S. cigarette manufacturers plan to purchase 454.6 million pounds (farm sales
weight) of 1998-crop flue-cured tobacco. Major domestic cigarette manufacturers
are required by statute to report annually to USDA their intended purchases of
flue-cured tobacco from U.S. auction markets and producers. Data on intended
purchases, average annual flue-cured exports for the preceding 3 years, and the
amount of tobacco needed to attain reserve stock levels are used to determine
the annual flue-cured marketing quota.

Flue-Cured

Auction Prices Fall in 1997
Prices for the 1997 flue-cured crop declined 6 percent from 1996. With larger
volume, the value of producer sales rose about 5 percent from a year earlier.
Loan placements surged to 19.4 percent, or 196 million pounds, compared with
virtually no loan takings in 1996.

Compared with the 1996 season, changes in prices of tobacco by grade and
production areas varied. The season-average price, $1.724 for gross sales
(including resales), is 11.3 cents below last year. Average prices were down
9.9 cents per pound in the Georgia-Florida belt; 9.9 cents in the old and
middle belt of North Carolina and Virginia; 10.1 cents in the eastern North
Carolina belt, and 15.2 cents in the North Carolina-South Carolina border belt.
Among the 54 markets having sales, season averages ranged from $1.67 to $1.76 a
pound.

With a larger effective quota, producer's marketings were 13 percent above last
season. Auction and nonauction sales totaled 1,014 million pounds, 118 million
above 1996. Sales were only 5.1 million pounds short of the effective quota of
1,019.4 million pounds due to lower yields.

Auction Sales
The Georgia-Florida markets (type 14) opened on July 22, and the South Carolina
and border North Carolina (type 13) opened the following day. North Carolina
(type 12) opened July 29 and North Carolina-Virginia (type 11) opened August 5.

Resales (leaf which was purchased at auction from a grower and sold at auction
a second time by the buyer) averaged 8 percent of gross sales, lower than in
1996. Again this season, there were no provisions for the Flue-Cured
Stabilization Cooperative or warehouses to handle carryover tobacco. Some
tobacco remains on farms for sale next year due to low yields in 1997.

Export Volume May Fall
Export prospects for the 1997 flue-cured crop are lower than last year. July-September shipments were down 23 percent and total 1997/98 flue-cured exports
may fall. Sufficient world supplies, lower priced leaf from competitor
countries, stagnant or declining cigarette consumption in major importing
countries, and reduced leaf use per cigarette all constrain leaf exports.

Supplies Decline in 1997/98
Larger marketings more than offset smaller carryin and boosted domestic flue-cured supply to 2.13 billion pounds, 3 percent above last year (table 16). The
flue-cured outturn was 8 percent below 1996 marketings. However, marketings in
1997 were about 13 percent higher than in 1996. Harvested acreage was up 7
percent, and yields gained 2 percent.

Domestic disappearance may decline because of increased use of imported
tobacco, reduced cigarette production, and increased shipments of semi-processed leaf.

Foreign Flue-Cured Production and Sales
This year's flue-cured production in Canada is estimated at 171 million pounds,
up 11 percent from last year. Auctions opened on October 16, and by December 1,
sales averaged Can$1.63 per pound, about 10 percent higher than a year earlier.
The U.S. equivalent price was about $1.21 per pound.

Brazil's flue-cured production is expected to surge 22 percent in 1997,
rebounding from 3 years of low production. Output in China is likely unchanged,
but output in India is expected up 7 percent.

The 1997 flue-cured crop in Zimbabwe was 8 percent smaller than the year before
(table 19). Markets closed on September 24. Prices averaged US$1.07 a pound, 27
cents below a year earlier.

Burley

Burley Auction Prices Slightly Lower Than Last Season

Burley auction sales through December 12 totaled 304.6 million pounds (gross)
and averaged $1. 9145 per pound. Including nonauction sales, growers sold about
half of the crop before Christmas. Quality is down a little this year.

Disappearance Up in 1996/97

During the year ending September 30, 1997, burley disappearance totaled 570
million pounds, 10 percent below the previous year. Domestic use fell 8
percent, and exports rose 14 percent.

Supplies Down

This season's burley supply, 1.33 billion pounds (estimated marketings plus
carryover), is 6 percent below a year earlier (table 17). The 1997 crop,
estimated at 563.1 million pounds as of December 1, is 9 percent above last
year's marketings.

This season's effective farm poundage quota of 880 million pounds was 22
percent above last year. Growers increased acreage 12 percent, but yields were
4 percent lower than a year earlier.

With 1996 marketings falling short of use, carryover on October 1 fell 13
percent from a year earlier due to reduced loan stocks. Both manufacturer and
dealer holdings declined. Carryover next October 1 will likely decline also.
The 1997/98 supply is about 2.3 times the probable disappearance, below
traditional benchmark levels. In addition, manufacturers and dealers held 374
million pounds of foreign-grown burley on October 1, 21 percent more than a
year earlier.

Decision on 1998 Quota Due By February 1

The 1998/99 outlook for burley hinges partly on the quota decision USDA is
required to announce by February 1. Legislation requires that the national
marketing quota be set by totaling (1) intended purchases by domestic cigarette
manufacturers (to be submitted by January 15, 1996), (2) the average exports
for 1995/96, 1996/97, and 1997/98 marketing years, and (3) an adjustment to
maintain loan stocks at the reserve stock level. At USDA's discretion, the
three-component total can be adjusted up or down no more than 3 percent.

Because this year's marketings are expected to fall short of the effective
quota, next year's effective quota will likely be substantially above the basic
quota.

Southern Maryland

Southern Maryland Disappearance Down

During the year ending September 30, 1997, disappearance of Maryland tobacco
was 12.6 million pounds, 2.1 million below a year earlier. Both domestic use
and exports fell from a year earlier. Supplies of Maryland tobacco are expected
to increase due to lower use. Use in 1997/98 may be similar to the two previous
seasons.

Total carryover on January 1, 1998 is expected to be larger than the year
earlier. The 1997 crop is estimated at 17.7 million pounds, about 1.6 million
above the previous season. The 1981 farm act provided for penalties for growing
and marketing Maryland tobacco in quota areas. However, quotas are not
applicable to Pennsylvania seed-leaf tobacco, and--because seedleaf prices are
lower--some seedleaf growers are changing to Maryland tobacco. In 1997, about
68 percent of total Maryland tobacco production was in Pennsylvania.

The supply for 1997/98 is about 36.2 million pounds, 5.1 million more than a
year earlier. Auctions for the 1997 Maryland crop will begin in March 1998 in
Maryland. Auctions for Maryland tobacco in Pennsylvania started December 8,
with little tobacco bought. Auctions are expected to reopen January 5.

Fire-Cured

Fire-Cured Auction Price Up

Auctions for Virginia fire-cured (type 21) opened December 8, with prices the
first 2 weeks averaging 33 cents per pound more than last season. Prices were
up in spite of production because of tight supplies. Quality was down from a
year earlier. During the first 2 weeks of sales, price gains were larger for
lugs and nondescript than for leaf grades. This year's Virginia crop is about
0.3 million pounds larger than last year.

Auctions for Kentucky-Tennessee fire-cured are expected to open in mid-January.
Direct purchases (country sales) for Kentucky-Tennessee (types 22-23) this
year, as well as last, may represent a large part of total sales.

The 1997 fire-cured crop is estimated at 40.6 million pounds, 1.8 million
pounds lower than a year ago. Declines in yields more than offset slightly
greater acreage. With a larger carryin, supplies of Kentucky-Tennessee fire-cured will increase slightly from a year earlier. Based on recent use, supplies
represent over 3 years' use.

Disappearance Higher

Disappearance of fire-cured types in 1996/97 was 42.2 million pounds--about 2.6
million pounds above the previous season. Domestic disappearance of types 22-23
fell slightly, but exports advanced. Kentucky-Tennessee fire-cured is used
mostly for moist snuff and plug chewing tobacco.

Dark Air-Cured

Dark Air-Cured Prices Up

Auctions for One Sucker (type 35) opened December 3, and Green River tobacco
(Kentucky-Tennessee air-cured type 36) opened December 4. Auctions for Virginia
sun-cured (type 37) opened December 9. Demand for One  Sucker and Green River
was strong during the first week, and prices advanced for all recorded grade
averages. Very little tobacco went under loan. Through December 12, prices for
One Sucker averaged $1.980 per pound, Green River averaged $2.196, and Virginia
sun-cured $1.914. The 1997/98 supply of dark air-cured (35-36), at 32.6 million
pounds, is about 1.4 million pounds below 1996/97.

Disappearance of dark air-cured tobacco during 1996/97 was 10.2 million pounds,
0.2 million lower than the previous marketing year. Moist snuff output was up,
but other traditional outlets declined from a year earlier.

Cigar Tobacco

Production Up Slightly, Supplies Decline

Increases in production of Pennsylvania filler, Wisconsin binder, and
Connecticut Valley binder combined to raise 1997 production by 1.5 million
pounds in 1997. However, lower carryin resulted in a drop in supplies. Use in
1997 is expected to fall by about 1 million pounds. October 1 stocks of
foreign-grown leaf in the United States totaled 115.6 million pounds, compared
with 80.1 million pounds a year earlier.

Filler and binder production advanced while wrapper production was unchanged
from last season. Most U.S. cigar output is sold directly on farms or through
cooperatives. As of early December, no sales of 1997-crop cigar binder or
filler had been reported. 

Supplies of Connecticut Valley wrapper tobacco for 1997/98 are about 300,000
pounds greater than last season. Cigar wrapper carryover next July 1 is
expected to be similar to this year. For 1997/98, binder supplies are down
because of short production.  Cigar binder disappearance totaled 12.4 million
pounds last season, down about 3.2 million pounds. Filler disappearance is
expected to rise in 1997, resulting in lower beginning stocks in 1998.

END_OF_FILE