Tobacco leaf-buying almost completed
Japan Tobacco International (JTI), the only multinational company that buys domestic tobacco and at the same time the largest producer of tobacco, finalized purchase of Virginia-type tobacco mid-November, starting with purchase of Burley-type tobacco in the beginning of December.
When it comes to Virginia, which accounts for the majority of JTI’s contracted production, this was the most successful year in terms of quality since beginning of production of this type of tobacco 28 years ago. Namely, out of the total purchased tobacco, the highest-class comprises 20 percent. Accordingly, a record average purchase price of more than 500 dinars per kilogram excluding VAT was achieved, while purchase prices for all classes increased by about 30 percent on average. The increase primarily related to the lower classes, to make it economically profitable to be harvested, dried, and handed over for purchase.
The purchase of Burley starts in the first half of December, and the purchase price of this type of tobacco has also been increased. Thus, compared to the initially contracted, new guaranteed prices were increased by an average of 27 percent. The prices of higher purchase classes have increased by 75 to 80 dinars per kilogram, and they now average over a record 400 dinars excluding VAT per kilogram of tobacco.
“We try to be a true partner to our tobacco growers. And that’s why, aware of the rising costs of living and production, we made the decision to significantly increase the purchase prices of tobacco, in order to support our farmers and preserve the production of this crop in Serbia,” said Željko Ananić, manager of production and processing of raw tobacco at the JTI company, and added that JTI closely cooperates with its tobacco growers, providing them with professional support at all stages of tobacco growth, as well as the necessary raw materials. In addition, the company provides cash advances without interest, as well as advances for the purchase of dryers and equipment for the production of irrigation systems for a period of three to seven years.
JTI company has started contracting tobacco production for the next year. Considering that the interest in tobacco production is increasing, it is expected that next year the contracted regions will be larger than this year. In 2023, JTI contracted production with around 300 producers in the territory of Srem, Mačva, South Banat and North Bačka.