US Digesting China's Big Leaf Purchase

Source from:  tobaccoreporter.com 11/28/2005

The size of a recent purchase of US flue-cured by China is being seen in some quarters as significant, but others are warning that the sale was more about price than changes in China's purchasing strategies. Writing in the Richmond Times-Dispatch, John Reid Blackwell reported that the China National Tobacco Corp had bought 14 million pounds of processed leaf, the equivalent of about 25 million pounds, farm sales weight. Previously, China had purchased only small amounts of Burley from the US. The flue-cured purchase, valued at $35 million, was said to have included 2005-crop tobaccos along with tobaccos from previous crops. Some observers have pointed out that this is the first year after the US tobacco-support program was dismantled, and that the Flue-Cured Tobacco Cooperative, which made the sale, has a stockpile of leaf it can sell cheaply. They say that Chinese buyers are highly sensitive to price, so it is unclear how much US tobacco they will want in the future. Enditem