crop report january 2016 - hail & cotton...

CROP REPORT

JANUARY 2016

2

CONTENT

BRAZIL BAHIA - FILLER PAGE 3

BRAZIL BAHIA - MATA FINA WRAPPER PAGE 4

BRAZIL ARAPIRACA - WRAPPER PAGE 5

BRAZIL CUBRA - WRAPPER PAGE 6

BRAZIL - FLUE CURED PAGE 7

BRAZIL - BURLEY PAGE 9

CANADA - DARK FIRE AND DARK AIRCURED PAGE 10

COLOMBIA - CARMEN CUBITA PAGE 11

DOMINICAN REPUBLIC - PILOTO CUBANO/OLOR/CRIOLLO PAGE 12

INDONESIA - BESUKI/NO-NORTH UTARA PAGE 13

INDONESIA - JATIM/VO PAGE 15

INDONESIA – BESUKI/VO PAGE 16

PARAGUAY - CRIOLLO PAGE 17

PHILIPPINES - ISABELA PAGE 18

US - FLUE CURED PAGE 20

US - DARK FIRE AND DARK AIR CURED PAGE 21

US - BURLEY PAGE 22

3

BRAZIL BAHIA – FILLER

HISTORICAL PRODUCTION

2015/2016 CROP STATUS

Growing conditions:

Growing conditions of the new crop have been mixed with periods of stronger rainfalls in the

beginning of the season and followed by periods of adequate rains and sufficient hours of

sunshine. Since the end of August we had almost no rainfalls. The first 60/70% of the crop

were harvested under normal conditions while the last part suffered a relatively big yield

reduction, resulting in a smaller crop than initially expected.

Current operational activity:

Purchase started at the end of November; so far quality of the tobaccos has been mixed, but

good on average.

HCIG/CdF Volume (packed weight) 2015/2016 crop: 500 MT

ECONOMICAL DATA

Exchange Rate January 4: USD 1,00 = 3,9588 BRL

Inflation: 10,67 % December 2015

1200

2000

1400

1100

0

500

1000

1500

2000

2500

2012/2013 2013/2014 2014/2015 2015/2016

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Crop Year

Bahia Production (Packed weight MT)

4

BRAZIL – BAHIA MATA FINA WRAPPER



Growing conditions:

In the beginning of the crop we faced a higher volume of rains than expected for the period,

resulting in reduced yield of the first cuts. During the remaining period the weather conditions

improved and the later transplanted tobaccos showed good development.


We have meanwhile received all tobaccos in our warehouse. They are developing well in the

fermentation process. Quality is medium for the first primings, resulting in less wrapper

material then projected but improving in the higher primings.

HCIG/CdF Volume (Packed weight) 2015/2016 crop: 55 MT

28

60 58 55

0

10

20

30

40

50

60

70

2012/2013 2013/2014 2014/2015 2015/2016

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Crop Year

Bahia Mata Fina wrapper Production (Packed weight MT)

5

BRAZIL – ARAPIRACA WRAPPER



Growing conditions:

Initial growing conditions were favorable, but in some areas followed by a period of stronger

rainfalls and then followed by a dry spell. This resulted in lower yields in those areas but other

areas had better weather conditions and tobaccos were not affected.

Overall growing area including fillers is quite stable compared to last year and farmers have

now finished harvesting.

We have been able to secure additional wrapper styles from this crop in order to meet

customer demand.

Crop volume of twist tobacco will be reduced somewhat due to the overall weather conditions.


We have received all tobaccos. Both wrapper and filler volume will be a little smaller than

projected. However quality has not been affected and we expect adequate wrapper yields,

though with a slightly smaller amount of longer tobaccos.

All tobaccos are in fermentation and developing well.


60

95

65

120

0

20

40

60

80

100

120

140

2012/2013 2013/2014 2014/2015 2015/2016

Vo

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MT

Crop Year

Arapiraca wrapper Production (Packed weight MT)

6

BRAZIL – CUBRA WRAPPER



Growing conditions:

Just like in the Mata Fina crop in the beginning we faced a higher volume of rains than normal

for the period, resulting in reduced yield of the first cuts. Later on weather conditions

improved and the later transplanted tobaccos developed well in the field and curing barns.


All tobaccos are undergoing fermentation at the moment. Quality is medium for the first

primings, resulting in less wrapper material then projected but we are expecting improvement

in the higher primings.


38

88 88 85

0

20

40

60

80

100

2012/2013 2013/2014 2014/2015 2015/2016

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Crop Year

Cubra wrapper Production (Packed weight MT)

7

BRAZIL SOUTH – FLUE CURED

As of January 8th, 2016 Summary:

Up to the end of December, around 50% of the flue-cured has been harvested

Adverse weather conditions, especially at the Old Belt, have affected the development

of the tips, reducing the size and the weight of the leaves

Rio Grande do Sul Central Area - Old Belt (345mm)

Harvested on this area is close to 88% and curing leaves showing fair to good quality,

with slightly lighter color than last crop, and yield lower than expected.

Highlands (351mm)

Fields are 47% harvested, and the tobacco is showing good maturity and orange color.

Yield is reaching the historical average.

South (228mm)

On this area, 33% of the tobacco has been harvested and the crop is showing good

tobacco, better maturity then normal and more “R” tobaccos.

Santa Catarina Coastal Area (165mm)

Harvest is already finished and tobaccos are showing an average crop.

Itajai Valley (226mm)

Fields are 71% harvested. Yields were affected by adverse weather conditions, and

cured tobaccos are showing fair to good quality.

Highlands North (229mm)

On this area, 42% of the tobacco has been harvested, and the yield and quality of the

cured tobacco are in line with the normal averages.

Paraná Irati Area (258mm)

As of today, 23% of the fields have been harvested. Normal yield and good quality with

mature tobaccos, resulting in deep orange color on the cured tobacco.

8

Volumes: Total Brazil Flue-Cured

Planted area:

Hectares

Yield: Kgs/Hectare

Volume: Kgs

2016 (Estimated) Source: Afubra

257,777 1,998 515,000,000

2015 Final

Source: Afubra 263,620 2,257 595,000,000

Crop Status: Estimate

Region Transplanting Topping Harvesting Curing Purchasing

Rio Grande do Sul

100% 90% 56% 56% 0%

Santa Catarina 100% 100% 71% 71% 0%

Parana

100% 70% 23% 23% 0%

9

BRAZIL SOUTH – BURLEY

As of January 8th, 2016 Summary:

Up to the end of December, around 69% of the Burley and 74% of the Galpão have been

harvested.

Very high volumes of rainfall have also beaten Burley and Comum areas, in the

Northwest of RS and the far west of SC (close to the Uruguay River) during the month

of December, were some areas have exceeded 600 mm.

Rio Grande do Sul Highlands (351mm)

74% of the tobacco has been harvested. This area is showing high yield and good

quality.

Santa Catarina and Parana West SC/PR (453mm)

69% of the fields were already cut. Unfavorable weather conditions have affected

final yield, but cured tobacco with fair to good quality.

AIR CURED GALPÃO West SC/PR (453mm)

73% of the fields have been harvested. The tobacco on this region had high hydric

stress, resulting in slightly thinner leaves and curing with a little lighter color.

Volumes: Total BRL Burley

Planted area:

Hectares

Yield: Kgs/Hectare

Volume: Kgs

2016 (Estimated) Source: Afubra

28,572 1,960 56,000,000

2015 Final

Source: Afubra 40,090 2,070 83,000,000

Crop Status: Estimate

Transplanting Topping Harvesting Curing Purchased

100% 90% 70% 25% 0%

10

CANADA - DARK FIRE AND DARK AIR CURED As of December 11th, 2015 Summary:

The DFC and DAC crop in Canada looks average from a quality stand point We see the crop as slightly below average in yield per acre 2015 Crop contracting was down about 18% from the 2014 crop Harvesting was completed in September and curing is complete

Volumes: Total Canadian DFC and DAC

Type Planted Area Yield: Lbs./acre Volume: Lbs.

2015 DFC 625 2,950 1,843,750

(836,310 kgs)

2015 DAC 107 2,700 288,900

(131,042 kgs)

Crop Status: H&C Estimate


100% 100% 100% 100% 100% DFC

100 % 100% 100% 100% 100% DAC

11

COLOMBIA – CARMEN CUBITA


2015 CROP STATUS

Growing Conditions:

Despite climatical conditions we have almost 75% of the crop in our warehouses.

Quality received so far is of average to good quality and develops well in fermentation.


We continue buying new crop and we expect to end purchases in January 2016.

We finished the SRTP program for the 2015 crop and we continue to work with our farmers

applying good agricultural practices and emphasizing the program NTRM going forward.

ECONOMICAL DATA

The Colombian economy has slowed down due to lower oil prices. Inflation increased.

Exchange Rate January 4: USD 1,00 = 3175 COP


1850 1900

2600

1250

0

500

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3000

2012 2013 2014 2015

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Crop Year

Carmen Cubita Production (Packed weight MT)

12

DOMINICAN REPUBLIC


Packed weight (MT) Criollo 2.340

PC/Olor 3.310

Burley 450

Total 6.100

2016 CROP STATUS

Growing conditions:

So far approx.. 85% of the tobaccos meant for the Premium market have been planted. The

Criollo tobaccos for mass market purpose are normally planted in this period. As the

predictions are for dry weather, we expect a small crop in general.

Other remarks:

Currently the market for fillers is very difficult. Most manufacturers have downsized their

indications for new crop, and this has a result in the field. Exporters have financed maybe half

the area that was planted last year. Especially the Criollo crop is expected to be very small.

Early estimates are as low as 3.5 M kgs in total.

The situation of the Haitian workers has normalized somewhat especially in the fields. The

local elections are in full play.

ECONOMICAL DATA Exchange Rate January 4: USD 1,00 = 45,54 DOP

Inflation: 1,54 % November 2015

8000

6200

2800

6100

3500

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

2012 2013 2014 2015 2016 est.

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Crop Year

Piloto Cubano/Olor/Criollo Production (Packed weight MT)

13

INDONESIA – BESUKI/NOTA – NORTH UTARA


2015 CROP STATUS

NOTA crop general:

Overall growing conditions throughout the 2015 Besuki season have been very favourable for a

good quality crop. Unfortunately due to the eruption of the Raung volcano a large part of the

NOTA crop has been affected. Those tobaccos that were not yet harvested and in the curing

barns at the time of South-Westerly winds have been affected. PTM managed to secure its

supply of the first unaffected part of the Free Market crop by starting purchasing early.

Besides the part that PTM bought from the Free Market we also purchased 100% of the yields

we had within our Direct contract growing program to emphasize our commitment to the

farmers aimed at growing a low CPA, zero Carbendazim and sustainable crop.

4700

35003000

5200

3200

0

1000

2000

3000

4000

5000

6000

2011 2012 2013 2014 2015

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Crop Year

Besuki NOTA (Packed Weight MT)

1500

3000

5000

3100

2000

0

1000

2000

3000

4000

5000

6000

2011 2012 2013 2014 2015

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Crop Year

Besuki North Utara (Packed Weight MT)

14

NOTA crop current activities:

The NOTA crop has been fermenting well and we are in the process of all types of sortation which

is expected to continue up to the end of February. Quality wise it is a clean crop with nice colours

leaning mostly to the MM, M and BB colour lines. We expect to be able to pack the first tobaccos

by the first week of January.

NaOogst/Utara crop growing conditions:

Weather conditions for the second crop have been favourable as well for most of the season.

Rains started around the second week of November which has caused some minor Cercospora

incidence in the latter part of the crop. Overall disease pressure before that was considered to be

low. In our main growing areas in the south like Wringin Telu, Bagon, Penitik, Ambulu and

Sulakdoro there is enough water for irrigation and therefore the overall quality of this crop is

very good. In this area we had 180 hectares under direct contract growing for this crop and yields

are high, averaging 2,000 – 2,200 kgs per hectare.

Since the volcanic eruption stopped in the second week of August there has been no negative

effect to this crop.

NaOogst/Utara current activities:

We have completed purchasing of the crop and all tobacco is under fermentation and expect to

be able to start with first sortation after we finish with the NOTA crop.

General stock situation old crops:

Very limited binder stocks available but still some large quantities of lower fillers in stock with

some exporters.

Construction:

As part of continuous upgrading of our facilities and improving our overall efficiency it was

decided to move our Mayangsari office from Jember city centre to Mayang, where the main

operation is located.

Construction of the warehouse has been completed and it was taken into use at the end of

September. Central office completion still on schedule for completion in January and the

Guesthouse still on schedule for March.

HCIG/CdF Volume (packed weight) 2014 crop: 1,500 MT

HCIG/CdF Estimated volume (packed weight) 2015 crop: 1,400 MT

ECONOMICAL DATA

Exchange Rate January 4: USD 1,00 = 13910 IDR


15

INDONESIA – JATIM/VO


2015 CROP STATUS

2015 crop situation:

Market for Jatim seems to be picking up slightly and we have seen a small growth in demand

from customers worldwide. Prices have gone down somewhat which has made the crop

somewhat more competitive with India and Bangladesh. Also the exchange rate helps a lot in

this matter. Lately some considerable remaining stocks have been sold and hopefully that will

stabilize the market.

There has been no negative effects from the Raung eruption on the Jatim crop as it is planted

more to the west. Traditional Jatim areas are forecast to produce abt 6,000 MT this year. This

excludes areas such as Madura and Kedu. Purchasing of Madura and Jatim has finished and

we are preparing for export.

20000

30000

1200014000

10000

0

5000

10000

15000

20000

25000

30000

35000

2011 2012 2013 2014 2015

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Crop year

Jatim VO (Packed Weight MT)

16

INDONESIA –BESUKI/VO


2015 CROP STATUS

2015 crop situation:

East Java Kasturi production went down during crop 2014 due to reduced demand from the

local market. Most of the big local manufacturers had reduced their purchasing. Crop 2015 saw

a similar trend. Overall quality of the Kasturi crop was good although a part was affected by the

volcanic eruption. The later plantings were not affected but the damage to the image of the

crop was already done. Prices are low, just like demand and it seems that the traditional

customers will prefer to skip one crop.

15000

25000

13000 12000

7500

0

5000

10000

15000

20000

25000

30000

2011 2012 2013 2014 2015

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Crop year

Besuki VO (Packed Weight MT)

17

PARAGUAY – CRIOLLO



Crop 2015/2016 will be shorter by 40 % compared to previous year, which was 2.600 tons for

export. This year only 1.600 tons. Little demand for Paraguayan Criollo results in a big

disappointment with tobacco growers, unable to commercialize their tobacco. This causes the

substitution of this cultivar by other crops that have a more secure sales perspective.

Growing Conditions:

Quality wise, weather has been favorable throughout vegetative growth and we hope to buy

good quality leaf. Harvesting of lower leaves has started with those who planted early.

General comments:

Exchange rate is favorable for exports but negative to local consumers considering Paraguay is

a huge importer of daily home consumption products. Argentina and Brazil are the main source

for these and contraband is rampant. Macro economy is excellent but this has not been cascaded

to the lower class citizens.

ECONOMICAL DATA

Exchange Rate January 4: USD 1,00 = 5782 PYG


2500

3200

2600

1600

0

500

1000

1500

2000

2500

3000

3500

2012/2013 2013/2014 2014/2015 2015/2016

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Crop Year

Criollo Production (Packed Weight MT)

18

PHILIPPINES – ISABELA (DAC & BURLEY)



Current operational activities:

The DAC is now fully fermented and the sorting and packing is now in full progress.

Burley is now packed and ready for shipping.

72007900

1200410

0

2000

4000

6000

8000

10000

2012/2013 2013/2014 2014/2015 2015/2016

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Crop Year

Isabela & Cagayan Province Production DAC (Packed Weight MT)

7560

9135

8000 8000

0

2000

4000

6000

8000

10000

2012/2013 2013/2014 2014/2015 2015/2016

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Crop Year

Isabela & Cagayan Province Production Burley (Packed Weight MT)

19


Growing Conditions:

Started well for the 2015/2016 Crop, with close to normal weather conditions. For the early

planted crop the quality was affected by higher than normal rain fall and temperatures during

the time of harvesting and curing, resulting in some incidents of green Cercospora leaf spots.

For the later planted crop the quality was good to normal.

Final DAC production for HCIG/CdF 2015 Crop was 220 MT (green).

Final Burley production for HCIG/CdF 2015 Crop was 307 MT (green)

Current operational activities:

For the 2016 Crop the planned production is DAC 100 MT.

Seed bedding is now well on the way and farmers have been selected and contracts are signed

for the crop. Transplanting to the fields started first week of December.

For the correct fertilizer application soil test have been analysed of the growing areas and all

fertilizers and CPA’s will be supplied by HCIG/CdF. Application and methods will be directed

by the HCIG/CdF agronomy department.

ECONOMICAL DATA

Exchange Rate January 4: USD 1,00 = 47,12 PHP


20

US - FLUE CURED As of December 11th, 2015 Summary:

Quality of the leaf/tips at receiving are better than lugs/cutters

5 million lbs. was lost due to early frost

Losses from recent hurricane were minimal

Harvest is complete

Volumes: Total US Flue-Cured

Planted area: Acres

Yield: lbs./acre

Volume: lbs.

2015 (Estimated) Source: H&C

218,300

2,016

440,092,800

(199,622,736 kgs)

2014 Final

Source: USDA

245,300

2,335

572,775,000

(259,809,000 kgs)


Transplanting Topping Harvesting Curing Purchasing

100% 100% 100% 100% 100%

21

US DARK FIRE AND DARK AIR CURED As of December 11th, 2015 Summary:

Quality of cured DFC received to this point is average. Harvest is completed in Kentucky and Tennessee. Buying of DFC began in September. Buying of DAC began in November.

Volumes: Total US DFC and DAC

Planted area: Acres

Yield: lbs./acre

Volume: lbs.

2015 DFC

(Estimated) Source: H&C

17,300

2,950

51,035,000 (23,149,000 kgs)

2014 DFC

Final

Source: USDA

18,630

3,175

59,146,000 (26,828,000 kgs)

2015 DAC

(Estimated) Source: H&C

6,000

2,600

15,600,000 (7,076,041 kgs)

2014 DAC

Final

Source: USDA

6,150

2,844

17,490,600 (7,934,000 kgs)



100% 100% 100% 100% 75%

22

US BURLEY As of December 11th, 2015 Summary:

20-30 percent loss from scalding and wilt due to excessive rain.

Harvest is completed and curing is underway.

10 percent of crop was not harvested due to lack of labor and frost.

Volumes: Total US Burley

Planted area:

Acres

Yield: lbs./acre

Volume: lbs.

2015 (Estimated) Source: H&C

81,200

1,613

131,000,000

(59,420,600 kgs)

2014 Final

Source: USDA

101,500

2,105

213,658,000

(96,914,400 kgs)



100% 100% 100% 95% 45%

crop report january 2016 - hail & cotton...

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