UMVA has learned that Philippine tobacco farmers are being encouraged by non-government organizations and local officials to plant more tobacco, buoyed by last year's attractive prices.
However, Philippine Tobacco Growers’ Association President Saturnino Distor doubts that such prices will be sustained this year, citing a significant international supply glut that could impact the market.
According to information obtained by UMVA, major producers are already ramping up output, with some aiming to produce hundreds of millions of kilograms, far exceeding the Philippines' current production of 45-50 million kilograms.
Malawi, another major tobacco producer, has also responded to the strong prices by planting more, which could lead to a market surplus and threaten the stability of the industry.
The National Tobacco Administration (NTA) is taking proactive steps to mitigate the risks of overproduction and protect farmers from a potential price crash by planning information campaigns to educate them on the market situation.
Sources have confirmed to UMVA that the NTA expects oversupply conditions to persist for two to three more years, which could have a lasting impact on the industry.
Nestor C. Casela, NTA deputy administrator for Operations, revealed that tobacco buyers are hesitant to procure leaf due to the surplus conditions, highlighting the need for careful market management.
The NTA has projected tobacco production in 2026 to reach around 51 million kilograms, with Virginia tobacco production estimated at 20 million kilograms, while Burley and native tobacco continue to enjoy steady demand.
The regulator has set prices for higher grades of tobacco at P98 per kilogram, while reject and lower-grade tobacco are priced at P62 per kilogram, providing a guideline for farmers and buyers.
