Traders vow to buy bulk tobacco leaves

Major tobacco buying firms have committed to buy all tobacco leaves of farmers in most regions to help them secure a stable income as the pandemic has affected trading and delivery of the commodity.

According to the National Tobacco Administration (NTA), Universal Leaf Philippines Inc., Trans-Manila Inc., Continental Leaf Tobacco Philippines Inc. and Associated Anglo-American Tobacco Corp. agreed to purchase leaves in the Ilocos Region, Cagayan Valley and Abra.

This means that all contracted tobacco growers are assured of reasonable income of their produce in the current crop year.

“We implemented beginning this year a new floor price, higher than the price of all tobacco types for the last two cropping seasons, and based on feedback from the buying stations, trading operation is alive and well, despite the lockdown,” NTA OIC administrator Roberto Bonoan said.

In February, NTA approved higher minimum buying prices for tobacco in the next two years following an agreement reached between farmers and the private sector.

Stakeholders recently approved a P2 increase in tobacco floor prices across all types and grades.

Floor price is the minimum price allowed by the government for the procurement of tobacco from farmers. This is based on the prevailing market conditions such as production cost, reasonable margin of profit for stakeholders and growing conditions.

The setting of the minimum floor price provides tobacco farmers a guaranteed minimum return on investment of at least 25 percent for expenses incurred in production.

NTA earlier requested the Department of Agriculture and local government units for the unhampered delivery of tobacco in their respective areas, and movement of NTA staff and trading personnel to the buying stations to receive tobacco from the farmers.

The trading season of cured tobacco in the Ilocos Region officially started last March 5 while the trading in the Cagayan Valley region started end-April.

Tobacco acceptances for all buying stations in the two regions reached 9.97 million kilograms valued at P744 million.

Bulk of the acceptances or about 67 percent are Virginia tobacco with 6.65 million kilos. This represents about 23 percent of the production target of 43.65 million kilos this year.

Trading operations will continue until the first week of June for Virginia, July for Burley and August for Native tobacco.

“The figure would have been higher if not for the extended stoppage of operations during the Holy Week and choke points in some areas due to strict implementation of safety protocols,” Bonoan said.

NTA expects a higher rate of acceptance in the coming days, with the implementation of the modified general community quarantine in Ilocos and other areas where the buying stations are located.