China: Leaf Tobacco Supply, Demand Stable in China

Source from:  Xinhua News Agency 07/16/2004

The supply of and demand for leaf tobacco in China has remained stable so far this year despite tobacco price fluctuations and increases in the cost of tobacco production, according to information released at a recent on-the-spot meeting on State purchase of leaf tobacco in southwest China's Yunnan Province. [img border=0 hspace="4" vspace="4" align="left" src=http://www.tobaccochina.com/english/picture/8e.jpg] So far this year, prices of grain and other farm produce as well as agricultural means of production in China have kept going up, increasing the cost of tobacco production and dampening the enthusiasm of farmers for growing tobacco. In light of such a situation, the STMA issued a policy on increasing the State leaf tobacco purchase price in a timely manner, and instructed local tobacco monopoly administrative authorities to adopt powerful measures to arouse the enthusiasm of farmer for growing tobacco, in an effort to prevent possible decreases in tobacco production. In response, the local tobacco monopoly administrative authorities in all the tobacco-growing regions in China managed to take effective measures to encourage farmers to grow tobacco, making great achievements. In the largest tobacco-growing region of Yunnan Province – known as the kingdom of tobacco in China, the total area of tobacco-growing farmland has reached 5.03 million mu (335,333 hectares) so far this year, an increase of 260,000 mu (17,333 hectares) over 2003. Meanwhile, the total area of tobacco-growing farmland in other Chinese regions has also increased to different extents – 2.78 million mu (185,333 hectares) in the southwestern province of Guizhou, up 150,000 mu (10,000 hectares) year-on-year; 850,000 mu (56,667 hectares) in the south central province of Hunan, up 120,000 mu (8,000 hectares); and 850,000 mu (56,667 hectares) in the southeastern province of Fujian, up 70,000 mu (4,667 hectares). The total area of tobacco-growing farmland in Sichuan, Shandong, Henan and other Chinese regions also increased. So far this year, the leaf tobacco inventories on the part of both the manufacturing and commercial sectors of China's tobacco industry have been sufficient and in a rational structure. By the end of May, the leaf tobacco inventories on the part of both the manufacturing and commercial sectors of China's tobacco industry had totaled 52.65 million dan (2.6325 million tons), up 1.47 million dan (73,500 tons) year-on-year. Specifically, the leaf tobacco inventories on the part of the manufacturing sector had reached 48.89 million dan (2.4445 million tons), up 3.63 million dan (181,500 tons), and the leaf tobacco inventories on the part of the commercial sector had reached 3.76 million dan (188,000 tons), down 2.15 million dan (107,500 tons). So far this year, in concentrated leaf tobacco trade conducted through the Intranet of the tobacco industry of China, contracts for the supply of 33.97 million dan (1.6985 million tons) of leaf tobacco have been signed, falling short of the planned leaf tobacco State purchase quantity of 34.59 million dan (1.7295 million tons) by 620,000 dan (31,000 tons). If these contracts are fulfilled by 90 percent, the actual supply of leaf tobacco in China will have reached 31 million dan (1.55 million tons) by the end of this year, indicating that the supply of and demand for leaf tobacco in China has remained stable. Enditem