Turkish tobacco output reached an estimated 118,940 tonnes in the first seven months of 2008, as the global recession slammed into the national economy. But production could be much lower.
Contracted Turkish tobacco production in the first seven months of 2008 stood at an estimated 118,940 tonnes, slightly higher than the previous year's output, despite the global economic downturn and government efforts to have tobacco growers produce alternative crops, the Turkish tobacco authority reported. But western tobacco merchants were saying that Turkey's 2008 crop would be just around 95,000 tonnes.
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Of these, leading leaf tobacco merchant Universal said on its website that 91,000 tonnes would be oriental, while Virginia and Burley accounted for 4,000 tonnes combined.
Turkey's main tobacco market, the Aegean market, was expected to open in February 2009. The Black Sea, Marmara and eastern and southeastern Turkish tobacco markets open in late March and late April. All tobacco purchases for the 2008 crop will be completed by the end of June 2009 at the latest, tobacco experts said.
Turkey was producing around 330,000 tonnes of tobacco annually as late as the mid 1990s. In 2008, the country had only 194,282 registered tobacco growers left, down from 583,474 in 2000. Tobacco production in Turkey has been in a steady decline since 1997, when the country produced 286,414 tonnes of tobacco.
The Turkish tobacco authority, the regulatory agency of the markets for tobacco products and alcoholic beverages, said on its website that the state contracted 118,855 growers to produce 27,421 tonnes of tobacco on behalf of the former monopoly Tekel, while some 50 merchant companies had signed contracts with 75,427 growers to produce 91,519 tonnes of tobacco.
Tekel's purchase agreements were for mainly low quality tobacco produced in the troubled Kurdish southeast Turkey, while the contracts of the private merchant firms were mainly for the high quality tobacco produced in the Aegean, Black Sea and the Marmara regions of the country. The merchant companies act as purchasing agents for foreign cigarette manufacturers in Turkey and abroad.
Since Tekel's cigarette plants were sold to British American Tobacco in February 2008 and the state tobacco monopoly has virtually ceased to be a viable enterprise, the Turkish state will no longer continue to buy tobacco starting in 2009, industry experts said. The 2008 crop probably will be purchased by the remnants of Tekel, or the soil products office, a state agricultural agency, for export sales.
"The state was buying an average 200 kg of tobacco from each of its growers. But with the privatisation of Tekel's cigarette factories, the state will cease to be a player in the market as it no longer has the cigarette plants to support tobacco purchases," Tahir Kanlikuyu, a manager of the Aegean tobacco exporters' association, based in Izmir, said in an interview.
Some 117,364 tonnes of the 2008 contracted tobacco crop is of the oriental variety, while 1,576 tonnes are Virginia and Burley combined, the tobacco authority said. It said some 79,279 tonnes of the 2008 tobacco crop is from the Aegean region, while 16,006 tonnes is from the Black Sea area. It said that 17,709 tonnes of the tobacco is from southeast Turkey, while 4,207 tonnes is from eastern Turkey and 1,740 tonnes from the Marmara region. From January to July 2008, private merchants and public entities acquired some 74,584 tonnes of tobacco from the 2007 crop, paying YTL 451.3 million (USD 380.8 million).
The tobacco authority said tobacco merchants paid YTL 354.5 million (USD 299.1 million) for 53,411 tonnes of the 2007 tobacco crop, while the state purchased 21,173 tonnes of the 2007 crop for YTL 96.8 million (USD 81.7 million).
Turkey exported 66,394 tonnes of tobacco from January to July 2007, earning USD 150.6 million, the bulk of the foreign sales coming from the 2005 and 2006 crops. In all of 2007, Turkey earned USD 449.8 million from the export of 113,932 tonnes of tobacco.
As the global economic meltdown began to hurt Turkish exporters, the government was offering incentives to tobacco farmers to grow alternative crops. Subsidies of YTL 1,020 (USD 793.5) per hectare are being offered to tobacco farmers to produce alternative crops.
Tobacco growers across the country expressed anxiety about their future. "Tobacco growers and their families will be forced to migrate to the crowded cities of western Turkey if they aren't subsidised," the regional newspaper Söz said.
The ministry of agriculture said that in 2009 it would provide only YTL 122 million (USD 80.67 million) in subsidies for the growing of tobacco, once Turkey's best-earning agricultural export product. Enditem
