Tobacco production to decline due to La Niña

Tobacco production may decline by 2.5 percent to 78 million kilograms due to the adverse impact of the La Niña weather phenomenon, the National Tobacco Administration (NTA) said today.

"Too much water is not good for tobacco. Several tobacco farms in the north was hit by the La Niña that is why we expect a slight decline in output for this year," NTA Administrator Edgardo D. Zaragoza said in a briefing.

The volume of tobacco produced in crop year 2010 rise to 73.75 million kilograms. This is more than double than the 2009 volume of 58.571 million kilograms.

Of these figures, Zaragoza said tobacco farmers had contributed over P34 billion ($796.25 million) in taxes to the government. Tobacco traders and cigarette manufacturers contributed about 4 percent to revenues being collected by the Bureau of Internal Revenue.

While there is a worldwide glut for tobacco and tobacco products, Zaragoza noted that the demand for Philippine tobacco continues to increase because of its high quality. He said over 50 percent of the country's tobacco production are being exported directly, with most of the remainder still being exported by traders individually.

The world's largest cigarette manufacturer, Phillip Morris, and the world's largest tobacco dealer, Universal Leaf, believe the country's tobacco market will continue to be viable in the next five years, Zaragoza said.

NTA noted that the Philippines imports other tobacco grades for blending. For this year, Zaragoza estimated that the country would import around 100 million kilos of tobacco from various countries.

He said this is because the blending of cigarettes usually requires around 40 types of tobacco.