Tobacco export revenue grows in Brazil

Although the Brazilian tobacco export industry’s numbers progressed by leaps and bounds in the first eight months of 2022, shipments tend to cool down and end 2022 with a relatively stable volume and lower revenue growth than last year.

According to data from the country’s Secretariat of Foreign Trade, as released by the industry union SindiTabaco, from January to August, shipments totaled 349.4 thousand tonnes, a volume 14.9% higher than in the same period in 2021, generating USD 1.4 billion in revenue, up 44.7% from the previous year, thanks to the increase in average prices.

Iro Schünke, president of the union, considers, however, that these increases were inflated by the strong sales pace in the first four months, after a slow-activity period at the end of last year caused by the shortage of containers and ships. Given this, he expects accommodation in the coming months.

According to Deloitte’s forecast, tobacco exports should end the year in line with 2021, when 464,400 tonnes left the country. As for revenue, the consultancy projects an increase of 6% to 10% compared to 2021 (US$ 1.5 billion).

See below the track record of the volume of tobacco (HS codes 2400 to 2403) exported from Brazil between January 2019 and August 2022. The data is from DataLiner.

Tobacco Exports | Jan 2019 – Aug 2022 | TEUs

Source: DataLiner (click here to request a demo)

Even though Schünke acknowledges that the outcomes could be a little better, he emphasizes that shipments are now back to normal following the issues that disrupted the flow last year. Brazil’s exports in 2020 totaled more than 500 thousand tonnes and brought in US$ 1.6 billion.

Thanks to the port of Antwerp in receiving this type of cargo, Belgium continues to be the main destination of Brazilian tobacco sales abroad. From January to August, the country accounted for US$ 360 million, ahead of China (US$ 248 million), the United States (US$ 103 million), and Indonesia (US$ 70 million).

“The production chain survived the pandemic, and shipments are expected to stabilize at around 500,000 tonnes in the coming years,” said Schünke. This return to normality is a relief for Brazilian producers since around 85% of production goes to customers abroad.

The harvest is concentrated in the country’s south. According to the Tobacco Growers Association of Brazil (Afubra), in the 2021/22 harvest, tobacco crops yielded 560.2 thousand tonnes in the region, 10.9% less than in the 2020/2021 season. The decline was primarily caused by a 9.8% decrease in planted area to 246.6 thousand hectares, but it also reflected a drop in productivity in Rio Grande do Sul because of weather-related issues.

Faced with reduced supply and rising production costs, producers increased prices. According to Afubra, producers in Southern Brazil sold a kilo of tobacco to industries for R$17.02 in 2021/22, on average, an increase of 61.5% compared to 2020/21. Thus, the total gross revenue received by tobacco growers in the south rose from R$ 6.6 billion to R$ 9.5 billion in comparison, despite the crop failure in the region.

Source: Valor Econômico

To read the full original article, please go to: https://valor.globo.com/agronegocios/noticia/2022/10/05/cresce-a-receita-das-exportacoes-de-tabaco.ghtml

Sharing is caring!