Tobacco floor price hike

The National Tobacco Administration (NTA) recently approved the new floor prices for tobacco for the next two trading years (2018 and 2019). The new prices for the three tobacco types, Virginia, Burley and Native, were approved during the continuation of the Tobacco Tripartite Consultative Conference held at the NTA Central Office in Quezon City last week.

For Virginia tobacco, which makes up almost 60% of the total tobacco production area in the country, the floor price per kilogram for the top grades increased to R82 for Grade AA, R81 for A, R80 for B, R78 for C, R70 for D, R69 for E; R60 for F1, and R57 for F2.

The former prices are 81 for AA, for A, R77 for B, R75 for C, R68 for D, for E, R59 for F1, and R56 for F2.

For Burley, the top-grade A rose by R2 bringing the price per kilo to R70 from the current R68. The floor prices for grades B, C, D, E, and F are now R67, R58, R47, R46, and R38, respectively, an increase of R2, except for Grade F which increased by R1, from the current prices per kilo.

The floor prices of the Native-type were increased as follows: High-grade, R79 R67 from R70 to R71; Medium 1, from R58 to R60; and Medium 2, from R48 to R50.

However, there would be no floor price increase for rejects, which remain at R46 for Virginia; R28 for Burley, and R40 (L-1) and R25 (L-2) for Native type.

Leaf buyers have insisted that there should be no price increase for low grades or rejects for all tobacco types to discourage production of low-quality tobacco leaves.