China clears Brazilian tobacco

Brazilian tobacco was once again certified by Chinese technicians from the General Administration of Customs of the Republic of China (GACC) to be shipped. Pre-inspection is one of the requirements of the current bilateral Brazil-China trade protocol for tobacco exports and includes the collection of samples of the processed product for laboratory tests that prove the Brazilian plant health before shipment.

The following graphs, based on data from DataLiner, show tobacco exports and derivatives from Brazil year to year since 2012. Although volume has fallen in recent years, the expectations are for a high, as volume has increased by 21% in the first five months of 2019 compared to the same period in 2018.

According to GACC supervisor Liu Fuchao, this year’s work has been successfully completed. “Two inspection groups have been in the region since mid-June and 60 samples were analyzed from a total volume of 43,000 tons purchased by China. Both groups saw the commitment of Brazilian companies to comply with the phytosanitary requirements of the agreement, ensuring the safety of the tobacco to China”, said the technician about the material that was analyzed in the laboratory of Unisc Analytical Center. The technical manager of the Phytopathology Laboratory, Professor Adriana Dupont, accompanied the laboratory analysis.

China has been an important partner of Brazilian agribusiness for some years and this also happens in the tobacco sector: in 2017 it was the second-largest buyer of Brazilian tobacco, generating US$276m in foreign exchange, which represented 13% of the total shipped that year. In 2018, due to logistical issues and the customer’s decision to postpone shipments for the first half of 2019, the country ranked third with US$165m shipped. As a result, an increase in shipments this year is expected. Research done in March by PriceWaterhouseCoopers confirmed this expectation, pointing to a 6% to 10% increase in 2019’s total shipments, both in dollars and in volume.

The chart below, based on data from DataLiner, shows the main destinations of Brazilian tobacco in 2018 and 2019:

“Historically, China is not the largest importing country due only to the port of Antwerp, Belgium, the destination of 40% of our product. We hope this solid relationship continues for many years,” said SindiTabaco President Iro Schünke.

Brazilian Tobacco Exports (Source: MDIC / Secex)

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