There are premises for reviving tobacco field – experts. Analysis by Info-Prim Neo

Experts consider there are premises to revive the tobacco field in Moldova, although the field has seen better days. Last year, tobacco was grown on the smallest areas in the last 10 years. Director of the Agro-industrial Agency “Moldova-Tutun” Petru Tarata told Info-Prim Neo that the export of Moldovan tobacco has great chances to grow. He mentioned about offers from transnational companies such as “British American Tobacco”, “GTI”, “Philip Morris” and companies from Belarus, Ukraine, Slovenia, and Slovakia. The importers’ offers amount to 12 thousand tonnes of tobacco at present, twice as much as the volume produced in Moldova. According to Tarata, “British American Tobacco” is purchasing 2.5-2.7 thousand tonnes of tobacco for 5 or 6 years already. For the first time 250 tonnes were purchased last year by the transnational company “GTI” and there are premises it will increase the volume of the purchases this year. Representatives of “Philip Morris” have also said the company is willing to purchase 3 thousand tonnes of Moldovan tobacco. According to the source, the transnational companies offer good prices, the average price constituting MDL 14.5 per kg of fermented tobacco. Until May 2005, when the exports of vegetal and animal production to Russia were halted, the share of Moldovan tobacco exports to this country constitutes about 70% of the total exported volumes. In light of this situation the exports on the Ukrainian market increased by 1.7-fold and those to Slovenia, Czech Republic etc have also increased significantly. About 5.6 thousand tonnes of tobacco were exported last year. The resumption of the exports is at present negotiated with Russia. Tarata hopes that the problem will be settled in the first quarter of this year. [Lack of money kills interest] Another premise, that could somewhat interest the growers and that could revive the field is, according to the expert, offering subventions to tobacco growers. Subventions were included for the first time in the Fund for supporting agriculture in 2006 in order to sustain the tobacco field. Although MDL 5 mln were planned for subsidising the field, in fact only about MDL 2.15 mln were turned to good account. The cause is the late spring. The producers did not want to risk producing high volumes of nursery transplant. Tarata mentioned that the tobacco producers are not interested in increasing the areas cultivated with tobacco because of the expenses, including the high cost of the lubricants and natural gas. Also, there is no sufficient workforce in the villages that would cultivate tobacco. Some of the producers are willing to increase the cultivated areas if the state would double the subventions of MDL 500/ha included in the Subvention Fund, Tarata said. This year only MDL 3 mln were included in the Fund in this respect compared with MDL 5 mln in 2006. About 3.4 thousand ha were cultivated with tobacco in 2005, the total crop totalling 5 thousand tonnes, one of the lowest in the last few years, bearing into mind that since 1986 the cultivated areas have gradually reduced. 1986 was the year when the highest crop was registered – 136 tonnes of tobacco. The Moldovan cigarettes were not officially exported in 2006. This fact is due to the increase in the taxes applied by the neighbour countries, which makes the Moldovan production less competitive on the foreign markets. At present, the local producers of cigarettes are “Tutun CTC” and several small companies,that produce insignificant volumes – the factory of Ciadar Lunga, “Inter-Tobacco” JSC in Orhei and “Mascautan Incom Angro” in Criuleni. According to the information provided by “Moldova-Tutun”, about 5.2 bln cigarettes were produced last year, by 1 bln cigarettes less compared with the previous year. The drop in the output was generated by the poor export competitiveness. One package of Moldovan cigarettes cost MDL 1.7 on the domestic market. Petru Tarata says that at present “Moldova-Tutun” has drawn-up a plan of actions on reviving the tobacco field in 2007-2010. The plan will be presented to the Government in the near future. It includes mechanisms aiming at increasing the planted areas and bills that will protect domestic producers.