china annual crop review 2010

8/4/2019 China Annual Crop Review 2010

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10-Oct-10 CHINA TOBACCO

ASSOCIATED TOBACCO COMPANY - CHINA


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Tobacco Crop Review 2010

ATC China - Page1

Tobacco Crop Review 2010C H I N A T O B A C C O

China Statistical InformationTotal Area: 9,600,000 sq. Km

Land Area: 9,326,410 sq. Km

Coast Line: 18,000 Km

Land use: Arable land: 13.09%

Permanent crops: 1.7%

Other: 85.21%

Population: 1.37 billionest.Oct.2010

GDP: 8.2%

CPI: 3%

Rate of Exchange: 1USD= 6.73 RMB (Oct, 2010)

FOREX Reserve: 2,454.20 Billion USD

8.19

6.81

5.50

6.50

7.50

8.50

2005 2006 2007 2008 2009 2010Sept.

Exchange Rate RMB-USD


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ATC China - Page2

STMA- State Tobacco Monopoly Administration

The tobacco Industry in China is controlled by State Tobacco Monopoly Administration

(STMA) with the head office being based in Beijing capital city.

STMA is responsible for the assimilation and compilation of Government policies and

directives and further outlines and defines the production quotas for:

Farmers production per province. Domestic factories / province ( domestic / export) Cigarette production, both domestic and export. Import and export both to and from international markets. Regulatory body on machinery and packaging divisions.

Below STMA is CTI in Beijing who is responsible for all import and export and export of

tobacco and the implementation of STMA mandates. The provincial arms of CTI and their

responsibilities are as follows:

CNTC - Responsible for tobacco production for domestic and export use. CTIEC - Responsible for sourcing, processing and marketing of tobacco for export

markets.


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ATC China - Page3

Total FCV production for 2010 isapproximately 2.4 billion kilostogether with approximately 114.5million kilos of Air Cured tobaccos(Burley and Oriental combined)resulting in a total production ofapproximately 2.51 billion kilos, asrepresented in the graph adjacent.

Tobacco Crop Production 2010

Chinese Tobacco Production and Export Quota

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YUNNAN GUIZHOU SICHUAN HENAN HUNAN FUJ IAN SHANDONG HUBEI HEILONGJ IANG LIAONING

FCV Production FCV Quota Burley Production Burley Quota

0

500

1,000

1,500

2,000

2,500

2006 2007 2008 2009 2010

Flue Cured Virginia Burley; Air Cured


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ATC China - Page4

Yunnan Province FCV 2010

Total crop production for 2010 is

approximately 938,500mt (green)

Export quota for 2010 is 73,000mt (green) Total production in 2009 is 930,000mt (green)

The main seed varieties used in this province

are K326, YN85, YN87 and Hongda. The main growing areas are Yuxi, Honghe,

Qujing andChongxiong respectively.

Guizhou Province FCV 2010 Total crop production for 2010 is

approximately 360,000mt(green) Export quota 2010 is 38,000mt (green) Total crop production in 2009 - 360,000mt

(green) Export quota 2009 38,000mt (green) The main seed varieties used in this province

are K326, YN85 (0ver 70%) and YN87.

Main tobacco growing areas: Zunyi, Bijie,

Qianxinan, Tongren and Qiannan.

Sichuan Province FCV 2010 Total crop production for 2010 is

approximately 176,500mt (green) Export quota 2010 is 18,000mt (green) Total crop production in 2009 - 190,500mt

(green) Export quota 2009 16,000mt (green) The main seed varieties used in this province

are YN85, YN87 and GD (Gold Dollar) Main tobacco growing areas: Liangshan,

Guangyuan, Panzihua, Luzhou and

Chongqing.** These igures for Sichuan province

include the Chongqing municipality area


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ATC China - Page5

Henan Province FCV 2010 Total crop production for 2010 is approximately

154,000mt (green) Export quota 2010 is 5,000mt (green) Total crop production for 2009 - 164,000mt

(green) Export quota 2009 5,000mt (green) The main seed varieties: YN87 (30%),

Zhongyan100 (36%),

NC89 (7%), and Y-6(13%)

Main tobacco growing areas: Sanmenxia,

Luoyang, Nanyang and Xuchang respectively.

Hunan Province FCV 2010 Total crop production for 2010 is

approximately 172,500mt (green) Export quota 2010 is 7,000mt (green)

Total crop production for 2009 -

175,000mt (green) Export quota 2009 7,000mt (green) The main seed varieties used in this

province are YN87, Zhongyan100, NC89

and Zhongyan 201.

The main growing areas: Changde, Xiangxi

and Changsha.

Fujian Province FCV 2010 Total crop production for 2010 is


Export quota 2010 is 3,00mt (green) Total crop production in 2009

150,000mt (green The main seed varieties used in this

province are K326, YN85 and YN87.

Main tobacco growing areas: Longyan,

Nanming and Sanming.


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ATC China - Page6

Shandong Province FCV 2010 Total crop production for 2010 is


Export quota 2010 is 5,000mt (green) Total crop production for 2009 -

75,700mt (green). Export quota 2009 5,000mt (green) The main seed varieties used in this

province are K326, NC89, Zhongyan100,

YN85 and YN87.

Main tobacco growing areas: Weifang,

Linyi and Rizhao.

Hubei Province FCV and Burley 2010FCV

Total crop production for 2010 is

approximately 98,500mt (green) Export quota for 2010 is 7,000mt

(green) Total crop production for 2009

86,000mt (green) Export quota for 2009 7,000mt (green) The main seed varieties used in this

province are Y87 (60%), K326 (33%),

Y85, Zhongyan100 and K326LF.

The main growing areas: Enshi and

Yichang.

Burley Total crop production for 2010 is approximately 28,000mt (green) Export quota for 2010 is 8,000mt (green) Total crop production for 2009 29,500mt (green) Export quota for 2009 8,500mt (green) The main seed variety used in this province is JB80.

Main tobacco growing area is Enshi.


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ATC China - Page7

Heilongjiang Province FCV 2010 Total crop production for 2010 is

approximately 70,000mt (green) Export quota for 2010 is 16,500mt

(green) Total crop production for 2009

79,000mt (green) Export quota for 2009 10,000mt

(green) The main seed varieties used in this

province are 91 21 and NC89.

Main tobacco growing areas are

Mudanjiang and Harbin.

Liaoning Province FCV 2010 Total crop production for 2009 is

approximately 28,500mt (green) Export quota 2010 is 7,000mt (green) Total crop production for 2009 -

25,000mt (green) Export quota 2009 6,000mt (green) The main seed varieties used in this

province are Liao15 and YN85.

Main tobacco growing areas: Dandong,

Tieling, Fuxin and Chaoyang.


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ATC China - Page8

Pricing Levels for 2010

Pre-season discussions with CTI suggest that pricing levels will remain on a par with lastyear, owing to existing market conditions pertaining to supply and demand. CTIconsider market stability to be of paramount importance and a pricing collapse as seenrecently in various world markets would not be accepted in China.

In view of the above CTI has kept the purchase price from farmers consistent with 2009levels.

Punitive price increases for the 2010 crop will be given to dealers and customers whohave failed to honor 2009 contracts and shipping schedules.

General Crop Overview

Three of Chinas top producing provinces i.e. Yunnan, Guizhou and Sichuan, whichaccount for approximately 1.48 billion kilos or approximately 60% of nation-wide

production, have experienced some of the most extreme growing conditions on record

for the last 100 years.

STMA in conjunction with CNCDR (China National Committee for DisasterReduction, MOF (Ministry of Finance) and MCA (Ministry of Civil Affairs) reacted

swiftly and to date contributions of over US$100 million have been applied to the worst

affected areas.

CTI approved a substantial increase in seedling production and distribution as a result ofthe high seedling morbidity throughout each of the regions; as a result all three regions

are expected to meet their quotas. In responding to the severe situation of protracted droughts, STMA is planning to

allocate RMB 3.5 billion (US$530 million) between the regions for the construction of

infrastructure facilities for tobacco fields.

Whilst extreme climatic conditions have had a negative impact on quality, the worsteffects have been largely negated thanks to the responsive efforts made by STMA and its

subsidiaries.


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ATC China - Page9

Points of Interest

China has over 20 million tobacco farmers growing tobacco on 15,910,000 Mu(1,060,667 Ha) of land.

China cigarette consumption in 2009 was approximately 2.3 trillion sticks. China tobacco industry paid 513.11 billion Yuan (US$76.24 billion) in state taxes in

2009.

CTI plans to invest 10 billion Yuan (US$1.49 billion) nationwide, for 3 consecutiveyears, commencing in 2010 on the modernization and mechanization of the tobaccoindustry infrastructure.

The China government is planning on raising taxes by as much as 10%. This is currentlyunder review and is yet to be passed into law.

The tobacco industry of southwest China's tobacco-producing Yunnan Province - knownas the kingdom of tobacco in China - generated 37.1 billion Yuan (US$5.46 billion) intaxes and profits in the first half of 2010, an increase of 3.7 billion Yuan (US$545million), or 11 percent, over the same period of 2009, according to a statement released

by the provincial tobacco industry.

END

china annual crop review 2010

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