New firm commits to buy more tobacco leaves

MANILA, Philippines - Tobacco farmers in Pangasinan, Ilocos region and Cagayan Valley yesterday welcomed the assurance of a new industry player that it would buy more tobacco leaves next year from them.

Ernesto Calindas, president of the National Federation of Tobacco Growers and Cooperatives Inc., said the assurance given by Mighty Corp. would mean a more reasonable pricing of tobacco leaves next year.

“It is time for a true competition in the tobacco industry, which pricing system was dictated previously by a monopoly through the merger of the two giants in domestic cigarette manufacturing,” said Calindas.

Earlier, Mighty Corp. executive vice president Oscar Barrientos announced that the Filipino-owned cigarette manufacturer would buy more tobacco leaves from farmers in Pangasinan, Ilocos region and Cagayan Valley in 2014

Until last year, the local tobacco industry had only one buyer for Virginia and burley tobacco leaves, and another buyer for export-quality leaves.

“Under those circumstances, we had to sell dried tobacco at prices that buyers offer, without any other option to sell to a serious competitor,” Calindas said, adding the Mighty Corp. has been the farmers’ anchor for the sale of their low-grade tobacco leaves.

He said the prices were fixed at P45 per kilo for the low-end leaves to P80 for quality ones.

Mighty Corp. recently hogged headlines when giant competitors sought congressional investigation over its sudden rise, eating up the markets of previously low-priced cigarettes with brands identified with Philip Morris Fortune Tobacco Corp. (PMFTC).

From a minimal five percent share of the domestic market, Mighty Corp. cigarettes bagged the 20 percent share in less than a year since the new tobacco sin tax law took effect this year.