Smallholder tobacco farmers often have low incomes, high expenditure on resources, high cost of land maintenance, and no reliable and sustainable food supply for their families because tobacco is grown in a specific season. Food insecurity and poverty are of concern in many of the world’s largest tobacco-growing countries, as increasing tobacco production diverts agricultural land that could otherwise be used to grow food. As a result, large transnational tobacco companies (TTC) are undertaking contract farming with the farmers. It typically involves legal agreements between smallholder farmers and large TTC, resulting in sharing of tobacco farming cost between both farmers and large TTC. Herein, companies support farmers through infrastructure, financial, and logistical benefits to ensure a continuous and sustained supply of raw material from the farmers. Owing to this, the market is expected to emerge lucrative for various stakeholders and farmers active in the raw tobacco leaves market.
RISING STRATEGIC INVESTMENTS CATALYSES MARKET GROWTH
Asia-Pacific is one of the prominent regions in the global raw tobacco leaves market. There are regulations and government policies on manufacturing and sales of raw tobacco leaves in the region. For instance, the Association of Southeast Asian Nations (ASEAN) governments committed to a vision and a “Regional Action Plan on Healthy ASEAN Lifestyles” at the 6th Health Ministers Meeting in 2002. The action plan, which identifies tobacco control as one of the priority policies issues, calls on member nations to adopt a Programme of Work on promoting healthy ASEAN lifestyles. Industry participants are introducing e-cigarettes, flavored cigarettes, and rolling-your-own products, particularly for youth and millennials. For instance, in August 2021, Japan Tobacco Inc. officially debuted Ploom X, their next-generation heated tobacco gadget. Such strategies are boosting the growth of tobacco industry, including raw tobacco leaves, in the region.
Universal Corporation, Sopariwala Exports, Alliance One International Inc., Leaf Only, British American Tobacco p.l.c., Leafcon International, BBM Bommidala Group, Star Agritech International, JT Group, and U.S. Tobacco Cooperative Inc. are a few key companies operating in the raw tobacco leaves market. These companies are operating in various countries across the world, which helps them in catering to a wider customer base.
