Major Tobacco-Growing Regions See Declines in Prices, Sales Income

Source from:  cei.gov.cn 03/05/2007

Major tobacco-growing regions across China registered in 2006 stability in leaf tobacco yield, increases in production costs, and declines in both marketing prices and sales income, according to results of a recent survey conducted by competent national price control administrative authorities. The survey, conducted in early 2007, covered 1,129 tobacco growers in 117 counties in 14 major tobacco-growing regions across China, including the provinces of Yunnan and Guizhou in southwest China, Henan in east central China, Hunan in south central China and Fujian in southeast China. STABILITY IN LEAF TOBACCO YIELD In 2006, the average unit leaf tobacco yield in major tobacco-growing regions across China reached 134.2 kilograms per mu (per 0.067 hectare), which was basically on a par with that of 2005. In the year, such major tobacco-growing regions as Henan, Fujian, Sichuan in southwest China, Shandong in east China and Liaoning and Jilin in northeast China enjoyed relatively fine weather conditions suitable for tobacco growing. Therefore, the unit leaf tobacco yield there went up year-on-year. In the same year, such major tobacco-growing regions as Guizhou, Chongqing in southwest China and Shaanxi in northwest China were hit by severe natural disasters including droughts and hailstorms. As a result, the leaf tobacco yield in the three provinces dropped by 9.6 percent, 12.7 percent and 17.4 percent from the previous year respectively. Meanwhile, the leaf tobacco yield in Yunnan, Hunan, Hubei in central China, Heilongjiang in northeast China and Guangxi in southwest China also declined to some extent. INCREASES IN PRODUCTION COSTS In 2006, major tobacco-growing regions across China saw their average unit production costs in cash reaching 610.29 yuan per mu (76.3 U.S. dollars per 0.067 hectare), up 27 yuan (3.4 U.S. dollars), or 4.6 percent, year-on-year. The increases in production costs in the year were attributed to increases in spendings on chemical fertilizer, mechanized farming operations, fuels, seeds and insurance premiums. MODERATE DECLINES IN PRICES In 2006, the unit leaf tobacco sales price in major tobacco-producing regions across China was 501.92 yuan (62.75 U.S. dollars) per 50 kilograms, down 17.06 yuan (2.14 U.S. dollars), or 3.3 percent, from the previous year. Except Liaoning, Shandong, Guangxi, Fujian and Yunnan, all the other major tobacco-growing regions in China saw their leaf tobacco sales prices decline in the year, chiefly due to natural disasters. As a result of such natural disasters as droughts, hailstorms, and damage by plant diseases or insect pests, the quality of leaf tobacco grown in these regions in the year obviously worsened, with the proportion of high-grade leaf tobacco in the total leaf tobacco yield declining, and with the proportion of low-grade leaf tobacco growing. SUBSIDIZATION UP, SALES INCOME DOWN In 2006, the tobacco monopoly administrative authorities in all major tobacco-growing regions managed to increase subsidization for local tobacco growers. Results of the survey indicate that tobacco growing farm households in major tobacco-growing regions across China were able to each receive 162.18 yuan per mu (20.3 U.S. dollars per 0.067 hectare) in subsidies for leaf tobacco production, an increase of 24.93 yuan per mu (3.2 U.S. dollars per 0.067 hectare), or 18.2 percent, over the previous year. Despite the increase in subsidization, the actual leaf tobacco sales income for tobacco growers in major tobacco-growing regions across China declined from 947.69 yuan per mu (118.5 U.S. dollars per hectare) in 2005 to 905.58 yuan per mu (113.2 U.S. dollars per 0.067 hectare) in 2006, down 42.11 yuan per mu (5.27 U.S. dollars per 0.067 hectare), or 4.4 percent, year-on-year, due to increases in production costs and declines in sales prices. However, as compared with the size of income from the production of cereals, edible oil, cotton and other field crops, income from tobacco growing remains significantly higher. Enditem