Pakissan.com; Promotion of tobacco and products export

Complexities of export of tobacco and its manufactures are well known. The peculiar feature of tobacco trade is that USA, being an important exporter of manufactured tobacco, is the leading importer of tobacco needed for blending purposes. Promotion of tobacco and products export

The quality of tobacco and price are the principal determining factors in its trade at the international level , in which a number of countries are involved. The tobacco crop is highly fascinating by any yard-stick. Not only it involves a scientific treatment, but it requires special attention by the producers during the production, curing and marketing stages.

This crop also carries a great economic significance and its impact on the fiscal and monetary policies of major producing, exporting/importing countries is quite pronounced.

In Pakistan though tobacco cultivation occupies relatively a small area of 0.27 percent of the total irrigated land in the country, it is of great economic significance as a source of revenue, employment and foreign exchange earnings to the country.

During 2001-2002, over Rs 21 billion were contributed to the Federal Exchequer as central excise duty and sales tax. Being a highly labour-intensive crop, about 80,000 persons are involved in its cultivation, 50,000 are engaged in 26 factories of the tobacco industry and another one million find indirect employment through its trading.

Also, it is an important source of foreign exchange earning for the country (Rs 286 million during 2001-2002). Had the production of tobacco crop not been developed by the Pakistan Tobacco Board on scientific lines, the country would have been importing raw material worth Rs 7 billion per annum (2000-2001).

One of the functions assigned to the Pakistan Tobacco Board under the provision of relevant law is to regulate, control and promote the export of tobacco and tobacco products.

In pursuance of the aforesaid function, the board makes, concerted efforts to promote the export of tobacco and its products so as to earn the much-needed foreign exchange for the country.

The Pakistan Tobacco Board has geared up its research and development activities to improve the yield and quality of tobacco so that it could be exported to other countries in larger quantities.

The Pakistan Tobacco Board is net directly involved in the purchase/export of tobacco. The tobacco and its products are exported mainly through the tobacco companies.

However, there are some other parties who also export tobacco and its products.

Year	Quantity exported		Value realised		Total Value
	Tobacco	Cigarettes	Tobacco	Cigarettes	Total Value
	(M. Kg)	(M. Nos)	(M. Rs)	(M. Rs)	(M. Rs)
1997-98	3.23	0.045	211.54	0.043	211.58
1998-99	3.42	0.200	235.11	0.057	235.17
1999-2000	3.90	16.060	273.13	7.440	280.57
2000-2001	5.98	11.770	578.05	6.220	586.18
2001-2002	3.20	108.240	231.11	49.180	286.18

Type of Tobacco	Botanical Species	Popular name	Usage
Flue-cured	Tabacum	Virginia	Cigarettes
Light air-cured	Tabacum	Burley	Cigarettes
Light sun-cured	Tabacum	Hookah	Hookah
Dark air-cured	Tabacum	Dark air-cured	Cigarettes
Semi-oriental	Rustica	White Patta	Chewing, Hookah, Biri
Dark sun-cured	Rustica	Naswari	Snuff / Cigarettes

S. No	Type of Tobacco	Production (M. Kg)
i	Flue-cured Virginia	55.13
ii	Dark air-cured	2.56
iii	White Patta	15.21
iv	Burley	0.59
		73.49

S. No	Type of Tobacco	Potential Production (M. Kg)
i	Flue-cured Virginia	80.00
ii	Dark air-cured	7.50
iii	White Patta	23.00
iv	Burley	1.00
Total		111.50

The research and development and other export promotion measures of the Board have started yielding fruitful results of motivating the growers to adopt modern technology and the present tobacco produce can conveniently meet the demands of importing countries.

The following figures of tobacco export and its products during last five years support the contention:

Decline in the export of tobacco during the year 2001 -2002 compared with the preceding year could be attributed to the following factors:

High prices of Pakistani tobacco compared to similar tobacco, from other countries, including China and India.

Geo-political situation after the incidence of September 11, 2001, which had, direct bearing on our exports and adversely affected our tobacco exports as well.

Conversion rate of Pak rupee against the dollar.

The following types of tobacco are produced in the country.

The production of cigarette-type tobacco, in Pakistan averaged over the last five years has, been as under:

The growers now have the potential to produce the following quantities of cigarette-type tobacco:

The production of cigarette-type tobacco in the country averaged over the last five years has been 73.5 million kg whereas the growers have the potential to produce 111.50 million kg.

Domestic requirements for flue-cured virginia tobacco (the main type for export) per annum is 45-50 million kg, while the country has the potential to produce 80 million kg.

Thus 30-35 million kg could he made available for exports, provided markets are identified for export. This will add manifold to foreign exchange earnings by this sector.

Area for Improvement

To ensure regular and consistent supply of required quality of tobacco for selected importing countries/markets. All the private stakeholders should adopt uniform policy regarding production of quality tobacco.
Tobacco companies shall provide training facilities to the growers and local dealers in the adoption of international grading and packing standards.
Education of growers, especially in cultural practices, curing/grading etc.
Timely availability of inputs ie NPK fertilizer and pesticides to be ensured to growers.
Timely grant of agricultural production loans to growers from the banks.
Introduction of new, grading system based on international standards to be jointly undertaken by tobacco companies and Pakistan Tobacco Board (PTB).
Development of autumn crop, especially for export.

(Khan Faraz is Secretary of Pakistan Tobacco Board).

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