tobbaco export to russia

INTRODUCTION

Tobacco is an important commercial crop grown in India. It occupies the third position in the world with an annual production of about 800 Million Kgs. Of the different types grown, flue-cured tobacco, country tobacco, burley, bidi, rustica and chewing tobacco are considered important. India stands 3rd in production of tobacco and in exports, Brazil and USA are ahead of India.
Tobacco and tobacco products earn approx Rs.20,000 Cr. to the national exchequer by way of excise duty, and approx.Rs.5000 Cr. by way of foreign exchange every year.
Introduced by the Portuguese in the 17th century, Indian tobacco is today appreciated worldwide for its rich, full-bodied flavour and smoothness. It is now an increasingly well-known and well-respected commodity in world tobacco markets and has found its way into cigarettes manufactured in many different countries.
Tobacco, in India, makes a significant contribution to the national economy by earning about US$ 900 million of foreign exchange, besides accruing US$ 3.4 billion to the central exchequer by way of excise levies on manufactured tobacco. Tobacco is an important commercial crop that provides employment to nearly 36 million people, who are engaged in the various process of tobacco cultivation, curing, grading, manufacturing and marketing.

Exports and Key Markets
Exports of Indian tobacco and tobacco products have witnessed a rising trend and growth in the past few years. Exports have grown at a rate of 15.8 per cent from US$ 322.49 million in 2005-06 to a record US$ 900.64 million in 2012-13. As of December 2014, the exports showed that India has so far exported 18,003 tonnes of tobacco in the period of 2014-15.
India is the second-largest exporter of FCV tobacco in the world.
Indian tobacco is exported to around 100 countries.
India exports unmanufactured tobacco primarily to Western Europe, South & South-east Asia, East Europe and Africa.
The data for the period 2014-15 suggests that India has exported around US$ 64.38 million worth of tobacco till December 2014.
Unmanufactured tobacco exports accounted for 86% of the total tobacco exports volume and about 77% of the value, while tobacco product exported accounted for the export.

India was the third leading world producer of leaf tobacco in the recent decade, following China and Brazil. Tobacco production in India averaged about 615,000 tons dry weight annually during 2006–08. About a third of the output consisted of flue-cured tobacco. The India Tobacco Board manages arrangements for farmers to grow tobacco and for the auction markets. All tobacco grown for commercial purposes is sold at through an auction system. Prices paid to farmers for tobacco increased in recent years as demand for domestic uses and exports expanded.
Many small farmers grow tobacco. The southern states of Mysore and Karnataka account for most of the production of flue-cured tobacco. Guntur is a major center for marketing leaf tobacco and preparation of supplies for export. Employment by cottage industries preparing the small bidis and mixtures for pipe tobacco is an important factor in India. Anti-smoking measures have included bans on smoking in public transportation and within 100 yards of schools.
India's leaf tobacco exports averaged about 168,000 tons annually during 2006–08, or about a tenth less than that by the United States. The value for India's leaf tobacco exports was $334 mn in 2007, for and average of $1,992 per metric ton. Flue-cured shipments accounted for over 80% of India's tobacco exports in recent years, and the average price for those sales was higher than the exports of dark sun-cured tobacco.
Belgium Is The Leading Destination For India's Tobacco Exports:
Belgium was the leading destination for India's leaf tobacco exports in recent years, followed by Russia, Philippines, Netherlands, and Germany. A large share of the leaf tobacco exported from India to Belgium is subsequently distributed to cigarette factories in other countries. India exported 22,561 tons of tobacco to Belgium in 2007, valued at $55.6 mn, for an average price of $2,462.39 per ton.
Russian Market Remains Important Despite Downward Drift In Shipments:
Russia has traditionally been a top export destination for India's tobacco exports, although shipments to Belgium became more important in the last several years. Moscow trading firms became large buyers of tobacco in India in the 1980s when use of rupees obtained from exports of Russian manufactured goods was arranged through trade agreements. In the recent decade the transactions have been on a commercial basis. India exported 18,913 tons of leaf tobacco to Russia in 2007. That was only about half the 39,055 tons of tobacco shipped from India to Russia in 2005.
India's share of Russian leaf tobacco imports was about 13% during 2003–05, but by 2006 it declined to about a tenth. Greater shipments of tobacco to Russia from Brazil and some suppliers in Africa other than Zimbabwe meant greater competition for sales of India's tobacco to Russia. India has been a major supplier of flue-cured tobacco for Russian cigarette factories for the last two decades, despite the downward drift recently for market share. The average price paid for tobacco imported from India was $1,642 per ton in 2007 was less than half the average for arrivals of Brazilian tobacco, and about a fifth of the price for imported US tobacco.

Expanding Indian Economy Contributes To Stronger Demand For Cigarettes:
India has been an economic success story in recent years. In the early 1970s, large sales of wheat and some other agricultural commodities were exported by the United States to India through food aid programs with payments made in local currency, the Indian rupee. About 35 years ago the conversion value for the Indian rupee was about 12 cents. Money accumulated with the Disbursement Office of the American Embassy in New Delhi, and some economists complained that the US was the largest holder of a savings account with Indian banks. Then in the late seventies, the State Department arranged to give the equivalent of about $6 bn to the Government of India. The funds were used effectively for many economic development programs. Thirteen universities were built after the pattern of US land grant universities with a special focus on studies in agriculture, engineering, and computer science. The Green Revolution was launched partly from those funds. This helped to finance irrigation projects, fertilizer and tractor factories, and other economic development projects.
Per capita income for India increased sharply in the recent decade, especially for the urban population. Good gains in manufacturing and agricultural output contributed to higher income. Great success for exports of manufactured goods provided some of the most remarkable gains for income. GDP increased about 9% in 2007. India recently had total exports of over $150 bn, or more than ten times the level two decades ago. Manufactured goods accounted for a rising share of exports in the last five years. Total exports were greater than imports in recent years, providing a trade surplus and an accumulation of foreign exchange. The value of the Indian rupee declined to an equivalent of about 2 US cents recently. Yet, many export and import contracts are made in US dollars or the euro. Crude petroleum accounts for about a third of the value for total imports.
Prosperity Brings Greater Sales Of Factory Made Cigarettes:
The prosperous economy has contributed to greater sales of manufactured cigarettes (called white cigarettes), despite a number of anti-smoking measures. For example, no smoking is allowed on trains. Places where cigarettes are sold must have a graphic display of the dangers of smoking. Increased taxes have been greater for white cigarettes than for bidis. Yet, the share of white cigarettes in the total sales of tobacco products has grown to about 100 bn pieces annually.
Manufactured cigarettes account for about a sixth of the consumption of tobacco products in India. Various laws have been passed to inhibit cigarette sales, but the advancing economy tends to pull up demand despite the measures made to depress sales. Gold Flake is considered India's premium cigarette brand. Import numbers do not provide a proper report for sales of imported cigarettes. Workers from other countries returning home for a visit often bring some major world brands with them. This includes some of the famous American brands and some of the leading brands found in the United Kingdom.
A wide variety of bidis can be found in India. Some bidis contain spices mixed with tobacco. Small cigarettes produced by many cottage industries provide about 38% of the tobacco products. Mns of people are employed in small shops where tobacco products are sold. Taxes have been increased on white cigarettes while it has not been considered favorably to administer greater taxes on sales of bidis.

Indian Tobacco Exports Touch New Highs

The Indian tobacco sector has made it to a new milestone. It has surpassed last year's record in terms of both quantity and value. In the financial year, 2013-2014, 2.64 lak tonnes of tobacco and tobacco products totalling Rs. 6059 crore were exported. Contribution of unmanufactured tobacco to volumes was Rs. 4842 crore. 29.534 tonnes of tobacco products valued at Rs. 1217 crore.

Exports to Western Europe dominated with over 34%. This was followed by Eastern Europe (14%), the Gulf(11%), South and South East Asia (20%). The Flue Cured Virginia tobacco exports have surpassed previous record of 1.74 lakh tonnes (clocked during 2009-2010) to reach 1.80 lakh tonnes.

FCV tobacco exports have hit new heights. Exports totalling Rs.4086 crore or $675 million were reached, according to the Tobacco Board. Exports of FCV tobacco during 2013-2014 have increased by 2% in quantity terms. In rupee and dollar terms, the increase has been 28% and 15%.

Major destinations for Indian unmanufactured tobacco for this period included Russia, Korea, Belgium, Netherlands, Germany, Yemen, Nepal and Poland. Indian tobacco exports have crossed the $ 1 billion mark during this year because of a strong dollar and an increase in the global demand of certain varieties of tobacco. During this current financial year, Indian tobacco industry reported exports of 6,059 crore which is a 22% growth over the previous year's 4979 crore.

The record for the highest exports so far in value terms was during the year 2009-2010. It was pegged at $928 million. Indian is the third largest producer of tobacco in the world. It is also the second largest exporter of tobacco. The surge in exports was due to the significant increase in exports of flue-cured tobacco at 1.8 lakh tonne for a value of 4085 crore up from 1.73 lakh tonne a year ago.

The country saw only a marginal growth in the overall volume of exports including unmanufactured tobacco as well as tobacco products such as cigarettes up at 2.64 lakh tonne. The dollar appreciated 11% against the domestic currency during the same period.

The two states which produce the largest amount of tobacco in the country are Andhra Pradesh and Karnataka. They account for more than half of the tobacco production in India. The Tobacco Board is positive about the tobacco exports during the current fiscal. It has been a massive achievement to cross the $1 billion mark in exports, according to Tobacco Baord chairman K Gopal.

The Indian Tobacco Board has set a target of Rs. 7000 crore of exports during the current fiscal. This is a growth of over 15% in value and a marginal growth in volume. Indian tobacco is more affordable compared to that manufactured by Brazil and Zimbabwe. Its USP was undoubtedly its price. While the average global tobacco price was $4 per kg, Indian tobacco was available at $2.7 per kg. The key markets that enabled the growth of the Indian tobacco industry were western and eastern Europe. Together, they accounted for about half the exports of unmanufactured tobacco in the world. Clearly, the Indian tobacco industry is set to scale new heights in the coming years.

Tobacco exports
The Indian tobacco is no way in- ferior to tobacco produced in foreign countries. Of the 250 million kg of virginia tobacco produced in the country, only 100 million kg is con- sumed domestically every year. The remaining 150 million kg is exported by a handful of exporters attached to two international merchants. Also, exports of cigarettes and value-added tobacco products had not been significant.
The Tobacco Board auction floors lacked competition. Sixty per cent of flue-cured virginia (FCV) tobacco produced in our country is exported. In 2004-05, tobacco exports formed 3.5 per cent of the total agricultural exports. Tobacco exports in 2005-06 com- prised 141,293 tonnes of unmanu- factured tobacco (leaf) worth Rs 10,169.4 million, while 109,244 tonnes of FCV tobacco (Rs 8493.2 million) formed the biggest component of unmanufactured tobacco. Hookah tobacco paste (9678 tonnes) led the exports of tobacco products followed by cigarettes (5857 tonnes). Andhra Pradesh and Karnataka are the two main FCV tobacco growing states. For the year 2005-06, India’s tobacco exports generated foreign exchange to the tune of Rs 14,130 million from shipments of 166.8 million kg in both commodity and finished form. Out of this figure, Rs 8570 million was from shipments of 109.5 million kg. For FCV tobacco alone, the break-up was Rs 4600 million from 67.7 million kg of A.P. Tobacco, and Rs 3970 million from 41.8 million kg of Karnataka tobacco. Industry sources estimate 2006- 07 export of FCV tobacco used in cigarette manufacturing to rise to 160-170 million kg in volume and to garner over Rs 12 billion in value. Exports of tobacco products were valued at Rs 2846.3 million during the period April to December 2005. They rose to Rs 3384.2 million in the same period in 2006. Russia was the largest importer of Indian tobacco in 2005-06. It imported 26,771 tonnes of tobacco (leaf and products) from India. It was followed by Belgium (15,411 tonnes), the UK (7919 tonnes), Vietnam (7749 tonnes), Germany (6354 tonnes) and Yemen (5885 tonnes). Among groups of nations, West Europe, by importing 31 per cent (43,352 tonnes) of Indian tobacco, was the largest importer. East Europe, which imported 39,484 tonnes (28 per cent), came in second. South Asia and South-east Asia bought 31,644 tonnes (22 per cent), Africa 12,618 tonnes, West Asia 7917 tonnes, North and South Americas 4034 tonnes and Australia 2244 tonnes.