Growers sell 1.6 million pounds of Kentucky burley tobacco to China

04/30/2004

More than 1.6 million pounds of Kentucky burley are being sold to Chinese buyers after growers reached a deal over the weekend. The Burley Tobacco Growers Cooperative in Lexington signed a $5.7 million deal with Chinese buyers Saturday. Last year, the co-op sold about 1 million pounds to China, the first sales to the tobacco-loving country. "It's a big sale and a small sale," said Danny McKinney, CEO of the co-op. "It's a small sale in that it's very few pounds, but it's a big sale because they are our first sales." China grows and uses more tobacco than the rest of the world put together, McKinney said, so the market is huge. The pounds sold came from the 2003 surplus or "pool" stocks bought by the co-op with federal loans. Often, the co-op will have to discount pool stocks to sell them, but not in this case, McKinney said. The Chinese paid an average of about $3.58 per processed pound this year, "and that's what we priced it at," he said. An eight-member Chinese delegation visited North Carolina and Canada as well as Kentucky. In North Carolina, tobacco dealers sold the Chinese 7 million pounds of flue-cured tobacco at a 20 percent discount, McKinney said. As domestic burley sales have dropped, exports have become more important to Kentucky farmers. "We had some very serious discussions before they left concerning future purchases. They are likely to return next March or April for more," McKinney said. Enditem