U. S. Tobacco Import Update 2005/06

Overview

U.S. tobacco product manufacturers use foreign-produced leaf in items such as cigarettes, cigars, chewing tobacco, and pipe tobacco. Imports peaked in the mid-1990s but remain at historically high levels. The popularity of generic cigarettes, which use cheaper imported leaf, along with increases in domestic leaf prices, were the chief reasons for heightened dependence on tobacco imports. Disappearance (use) of foreign-grown tobacco followed a similar upward trend. As tobacco exports and domestic sales of generic cigarettes advanced, imported leaf use rose. The proportion of imported leaf remained high even after exports declined. During the 2005/06 crop year, use of imported tobacco slipped 6 percent. Imported flue-cured and burley use slipped, and Oriental leaf use advanced. Foreign-grown cigar leaf use advanced as domestic cigar production rose. Imports of flue-cured and burley tobacco continue to be regulated by a tariff-rate quota.