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Brazil doubled its exports in the 1990s and the tobacco industry reached the end of the second millennium very well positioned in the world tobacco market. Brazil consolidated its position as the largest tobacco exporter in the world. It has shown record productivity - in large measure due not only to technologies adopted but also to integration of growers and the processing sector.

Over a decade, Brazil benefited from market forces that included short supply and growing demand. On the one hand, production declined in the United States of America and in Zimbabwe, Brazil’s major competitors; on the other hand, markets benefited from the entry of major buyers such as China, Germany, Japan, the Republic of Korea, Russia and countries in the Far East.

Cigarette exports are increasing. In the late 1990s, exports to MERCOSUR countries accounted for almost one-eighth of Brazilian tobacco companies’ total revenues from exports. At the same time, the Eastern European market expanded, and they and the Latin American countries were the main buyers of Brazilian cigarettes, primarily the international brands "Hollywood" and "Free", manufactured by Souza Cruz.

Markets for cigars abroad are mainly Côte d’Ivoire, France, Madagascar, Morocco, Senegal, Spain (especially the Canary Isles) and the United States of America.

Brazil is also an importer of tobacco leaf, cigars and cigarillos, cigarettes and other forms of tobacco processed products, and a net importer of cigars after 1996, with net cigar imports of US$1.7 million in 1998.

Tobacco leaf exports have grown consistently over the last 25 years, 128 000 tonnes in 1980 to 410 000 tonnes in 2001. Prices increased, going from US$2 214/tonne in 1980 to over US$3 000/tonne in 1996/1998. In 1990 and 1991 average export prices increased to such an extent that area increased in the major producing states. With the introduction of export taxes in early 1999, exports felt dramatically.

2.8.1 Future developments in the tobacco trade

Brazil’s potential as exporter attracted the attention of foreign tobacco companies. Quality improvement and steady supplies are the key strategic elements to penetrate and hold an important market share in world markets.

Every effort is being made to meet world demand requirement, not only in the area of quality control, but also in the area of environment protection and other requirements (social clause). Residue and alkaloid level analyses have been introduced, and campaigns implemented to reduce foreign material in tobacco. Companies have implemented traceability practices to identify growers who have not yet adapted to “clean tobacco” requirements, and “The Future is Now” programme aims to remove child labour from tobacco growing and processing.

A critical problem is falling prices: from US$3.64/kg in 1996 to US$2.25/kg in 2001, and such falling prices influence production, as supply is highly responsive to export prices.

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