TOBACCO--SUMMARY June 14, 1996 Approved by the World Agricultural Outlook Board ----------------------------------------------------------------------------- This SUMMARY is published by the Economic Research Service, U.S. Department of Agriculture, Washington, DC 20005-4788. The complete text of TOBACCO is available 2-3 working days following release of this summary. ----------------------------------------------------------------------------- TOTAL LEAF DISAPPEARANCE UNCHANGED IN 1995/96 Total disappearance of U.S.-grown tobacco during the 1995/96 marketing year is likely to be unchanged as cigarette production is steady. However, use will likely exceed marketings, so stocks carried over to the new marketing year (beginning July 1, 1996 for flue-cured and October 1, 1996 for burley and other kinds) should decline. March planting intentions indicate a 3-percent increase in flue-cured acreage from last year. Production should reach about 900 million pounds if average growing conditions prevail and planted acreage reflects growers' March intentions. Supplies in 1996/97 could exceed 2 billion pounds, with marketings approaching production. Burley growers indicated they would plant 20 percent more acres than last year. Low production in 1995 resulted in an effective quota of 724 million pounds for 1996/97. With average yields, production is set at nearly 590 million pounds. Transplanting was delayed by wet weather, but the planted crop appears to be in good shape. Cigarette production was fairly steady in 1995/96. Higher cigarette exports offset slightly lower consumption, resulting in a slight increase in removals. In 1994/95, Americans smoked 488 billion pieces, but are expected to smoke 2 billion fewer during 1995/96. Unmanufactured tobacco export volume on a marketing year basis will likely increase 9 percent from the previous year. Shipments of flue-cured and burley may be slightly higher for 1995/96 than the previous year. An estimated 350 million pounds (farm sales weight) of flue-cured and 170 million pounds of burley will be exported. During 1995/96, unmanufactured tobacco imports (duty paid) are expected to gain 13 percent, reaching 443 million pounds. On April 1, 1996, U.S. manufacturers stocks of imported cigarette tobacco were above a year ago. Stocks of foreign flue-cured were up 11 percent while imported burley leaf stocks fell 8 percent. Oriental stocks increased 25 percent, and cigar stocks rose 9 percent. Total disappearance of U.S.-grown flue-cured tobacco in 1995/96 is forecast up 3 percent from last season s 915 million pounds due to greater exports and use in cigarette manufacturing. Disappearance is expected to be higher than marketings, so carryover is expected to decline. Marketings in 1996/97 are expected to about equal use. Total burley disappearance in 1995/96 is likely to decline from last season s 623 million pounds, by about 23 million pounds. Domestic use is also expected to decline but exports should rise. October 1 stocks will be lower than last year s 959 million pounds. Prices of 1995-crop Maryland tobacco rose 9 cents per pound to $1.57 per pound, auction prices gained 4 cents per pound to reach $1.67. Auction sales in Maryland began on March 8 and lasted 15 days. Prices in both Pennsylvania and Maryland increased. Total disappearance in 1995/96 will likely decline from 1994/95. Total disappearance from October 1995 through March 1996 was 6 million pounds, down 2 percent from the previous year. Total fire-cured tobacco use will likely be lower in 1995/96 due to reduced exports. Domestic use is expected to decline slightly. Dark air-cured tobacco total use in 1995/96 is expected to decline because of lower domestic use and exports. Acreage intentions in 1996/97 for all types of tobacco are 9 percent higher than in 1995/96. Auction prices for 1996/97 will likely decline slightly from the previous season because of higher production. Maryland type tobacco planting intentions for 1996/97 were lower, and given average yields, production will decline by almost 1 million pounds. Fire-cured tobacco (types 21-23) planting intentions were down about 4 percent. Normal yields will produce a crop about 3 percent smaller than 1995/96. Given reduced planting intentions, dark air-cured production in 1996/97 should be slightly lower, and supplies are expected to decline. Cigar tobacco acreage is projected up 2 percent in 1996/97, but production is expected to fall from 1995/96 as yields that year were unusually high. Printed copies of the Tobacco Situation and Outlook report should be available in about 1 week. For further information contact Tom Capehart (202) 219-0890. Text of the full report will also be available electronically. For details, call (202) 219-0515. END-END-END