BAT Calls for Consistent Leaf Trade Quota

Source from:  Tobacco Reporter 02/18/2011

British American Tobacco (Cambodia) has called for the establishment of a consistent quota for the export of duty-free tobacco to Vietnam after the losses suffered by its farmers when the quota system was dropped for much of last year, according to a story in The Phnom Penh Post. Under a bilateral agreement, Cambodia was allowed to export 3,000 tonnes of leaf tobacco to Vietnam free of duty from 2007 to 2009. The agreement was not in force for much of last year, according to the Ministry of Commerce's director general, Sok Sopheak, though it was renewed late last year. "[The quota] is good for the country, and good for farmers," said Kun Lim, BAT's head of corporate and regulatory affairs. But he added that while the company supported the quota system, it would like to see it put on a firmer footing. "Such quotas were not available in 2010 due to some technical issues, and as such the price of tobacco dipped by more than US$0.50 per kg which resulted in low returns to farmers of around US$453 per ha," the company said in a press note issued earlier this year. Peak returns of nearly $2,000 per ha were recorded in 2009 due to increased local demand and the Vietnamese duty-free quota program. Enditem