HAVANA (Reuters) - Cash-short Cuba is slashing the amount of land devoted to growing its famous tobacco by more than 30 percent as the global recession and worldwide spread of smoking bans bite into sales of the country's prized cigars.

Demand for Cuba's cigars fell 3 percent in 2008 and earlier was reported down 15 percent in 2009 because of the recession and the smoking bans adopted in a growing number of places as a public health measure.

Cuba's National Statistics Office, in a report posted on its web page (www.one.cu), said land to be planted with tobacco for next year's crop had dropped to 49,000 acres, down from 70,000 acres, which was in turn less than 2008.

It said the coming crop was expected to be 22,500 tons, down from a planned 26,800 tons. The office blamed the drop on "financial restrictions that made it impossible to count on the necessary resources."

Cuba's prized cigar brands, including Cohiba, Montecristo, Trinidad and Partagas, dominate the world's premium market with 70 percent of sales.

That jealously guarded market share excludes the United States, however, where Cuba's cigars are banned under the 47-year-old U.S. trade embargo against the communist-led island.

A representative of the exclusive distributor of Cuban cigars, Habanos S.A., a joint venture between Cuba and British tobacco giant Imperial Tobacco Group Plc, said the company had no comment on the statistics office report.

Some 200,000 private farmers and their families depend on growing and curing the precious leaf under contract with the government, and tens of thousands of workers earn their living hand rolling the crop into the famous "Habanos" or "Puros" for export.

Tobacco seedlings are currently being readied for planting from November through January, with harvesting of the quick growing leaf beginning 45 days later. After that a year-long process of drying and curing begins.

Cuba's dozens of cigar rolling factories have operated at well below capacity this year.

That is bad news....
I guess it was just a matter of time before the smoking bans bite in (although the smoking bans here in Vienna are still pretty lax).

Do you also suppose that quality is also playing a role here?
thanks for the post.
coolfx

THE SKY IS FALLING - - -THE SKY IS FALLING - - -

Expect the acreage to be risen significantly when - I say "when" rather than "if" - the embargo is lifted.

This said, maybe I'm wrong, since Cuba is waging it's future on bio-technology rather than agriculture. If I were pessimistic, I might even say that we are witnessing the last few decades of the Cuban cigar industry as we know it.

Let's face it, cigar smokers are a marginal bunch at best, and the current buyers of CCs - the important part of it - are of an older generation which will, if the tendancy maintains itself, disappear within the next 30 years.

(dramatic music punch - pom! pom! pom!)

Interesting.
But the problem with Cuba is that pricing does not move as the law of demand and offer.

quote:

Originally posted by Xavier1975:
Interesting.
But the problem with Cuba is that pricing does not move as the law of demand and offer.

The exact same thing can be said about the wineries of Napa and Sonoma. Their greed is legendary. So, it's unlikely that the pricing of Habanos will drop.

quote:

Originally posted by flashman:
Expect the acreage to be risen significantly when - I say "when" rather than "if" - the embargo is lifted.

This said, maybe I'm wrong, since Cuba is waging it's future on bio-technology rather than agriculture. If I were pessimistic, I might even say that we are witnessing the last few decades of the Cuban cigar industry as we know it.

Let's face it, cigar smokers are a marginal bunch at best, and the current buyers of CCs - the important part of it - are of an older generation which will, if the tendancy maintains itself, disappear within the next 30 years.

(dramatic music punch - pom! pom! pom!)

I agree Flashman. As far as the bio tech part. This could turn out to be the sad truth. But also there are many young folks that are taking up cigars and if they can stay away from Acids and learn to like premium cigars they will move on to Habanos.
IMHO.

quote:

Originally posted by littoines:

quote:

Originally posted by flashman:
Expect the acreage to be risen significantly when - I say "when" rather than "if" - the embargo is lifted.

This said, maybe I'm wrong, since Cuba is waging it's future on bio-technology rather than agriculture. If I were pessimistic, I might even say that we are witnessing the last few decades of the Cuban cigar industry as we know it.

Let's face it, cigar smokers are a marginal bunch at best, and the current buyers of CCs - the important part of it - are of an older generation which will, if the tendancy maintains itself, disappear within the next 30 years.

(dramatic music punch - pom! pom! pom!)

I agree Flashman. As far as the bio tech part. This could turn out to be the sad truth. But also there are many young folks that are taking up cigars and if they can stay away from Acids and learn to like premium cigars they will move on to Habanos.
IMHO.

I agree with you Mike, but at the same time, I don't know that younger smokers can make up for smokers lost. I mean, a whole lot of people are really paranoid about the health risks. I mean, at UB, they're making it against the rules to smoke anywhere on campus, even parking lots, etc. There are a lot of young people who really believe that one breath of second hand smoke will acctually cause serious health problems.
I think that the numbers of smokers will decrease over time and eventually you will see only a few major brands, since the market will be small.

quote:

Cuba's National Statistics Office

Well - there you have it. Bona fide proof that the story is just a total load. Cuba's National Statistics Office!!! BWAAAAHAHAHAHAHAHAHA!!!! Oh man - I have milk coming out of my nose, and I haven't had milk in 25 years and that in a White Russian.

Just an excuse to maintain high prices under the guise of supply and waning demand. If they want to move product, they should lower prices. But that only happened once in Cuba. Instead of lowering prices to move stock, they RAISE prices. It's totally backwards there. If they lowered prices about 10%, they could INCREASE their crop yields and probably TRIPLE their sales revenues. Instead, it's not the world economy that's "hurting" them. First, it's the illusion of the embargo. Second, it's their own ridiculous economic policies (such as they are). Those in charge of those policies have absolutely no vision.

The ONLY brilliant thing they did was to go to the Convertible Peso and move away from the USD. All of a sudden, millions of dollars poured in that were being stashed in mattresses all over the country. Apart from that? They shoot their own feet.

NOTE: This has very little to do with the number of smokers, smoking laws, a waning of the fad...that's just a pretext.

quote:

Originally posted by ColginIX:

quote:

Originally posted by Xavier1975:
Interesting.
But the problem with Cuba is that pricing does not move as the law of demand and offer.

The exact same thing can be said about the wineries of Napa and Sonoma. Their greed is legendary. So, it's unlikely that the pricing of Habanos will drop.

Agreed the global rescission/depression cannot interfere with the price of her Cuba's cash crop!

I just picked up a box of Cohiba Genios for less then they sell in Cuba. Prices are the best I have seen in along time.

quote:

Originally posted by Steve Cohen:
I just picked up a box of Cohiba Genios for less then they sell in Cuba. Prices are the best I have seen in along time.

Agree - you have to be nuts to go to Cuba for cigars unless there is something specific that you are interested in.