Tobacco buying price remains firm

MANILA, Philippines - Tobacco buying prices in Ilocos trading stations remain with in floor price levels three weeks into the trading season, the National Tobacco Administration (NTA) said yesterday.

Tobacco floor prices are adjusted by the government every two years upon consultation with industry stakeholders to ensure profit for farmers and adequate supply for buyers.

Prices of three tobacco variants traded locally have been raised for trading year 2014 and 2015.

The new floor prices for Virginia tobacco rose by P6 per kilogram across all grades. The new buying prices for grades of this variety are as follows: AA, P78; A, P75; B, P73; C, P71; D, P66; E, P65; F1, P59; F2, P56; R, P46. The new minimum buying prices for Burley rose by P3 to P10. The new minimum buying prices for grades of this variety are: A, P61; B, P59; C, P53; D, P45; E, P44; F, P37; R, P28. The new minimum floor prices for native tobacco rose between P4 to P10. The new floor prices for grades of this variety are HG, P66; Medium 1, P56; Medium 2, 46; Low 1, P38; Low 2, P26. Taken into consideration in the adjustment of the buying rates is the imposition of the higher excise taxes on tobacco products which is feared to affect consumption.

“We have expected better prices this year than they were last year because of the increase in floor prices,” NTA administrator Edgardo Zaragoza said.

NTA has stationed extension workers in trading posts to mediate in disagreements on leaf classification between farmers and buyers and to make sure that farmers conform to proper trading protocol.

Government data shows that domestic tobacco production increased 12 percent from 48,080 metric tons in 2012 to 53,750 metric tons in 2013.

Roughly half of local output is exported to markets such as Europe, United States, Japan and Hong Kong.

The tobacco trading season is seen to continue until June.