Bloomberg News

BAT Uganda Lowers Crop Target 11%, Sees Possible Further Cut

June 21, 2011

(Updates with possible further cut from first paragraph.)

June 21 (Bloomberg) -- British American Tobacco Plc’s Ugandan unit, the country’s biggest producer of the leaf, cut its crop forecast for this year by 11 percent after a drought, and said a stunted harvest may further pressure estimates.

Contracted farmers may produce as much as 16,000 metric tons this year, from an earlier forecast of 18,000 tons, Solomon Muyita, the corporate and regulatory affairs coordinator at BAT Uganda Ltd., said in an e-mailed response to questions today.

“Our farmers, especially in the main tobacco growing area of West Nile, didn’t receive enough rain this season to support a good crop,” Muyita wrote. “Because of the adverse drought in the first half of 2011, it will be no surprise if our new volume targets also drop.” The harvest will still be larger than last year’s 14,000 tons as the company controlled pests and diseases.

Harvesting and curing of the crop has begun, with marketing expected to start in early July, Muyita said. Aerial surveys show the crop from West Nile is “generally stunted,” he said.

BAT Uganda produces mainly flue-cured tobacco, dried in a closed barn with heat piped from a furnace, and burley, treated in the open air, according to the company. Small quantities of lower-quality dark fire-cured tobacco are also produced.

--Editors: Tony Barrett, Dan Weeks

To contact the reporter on this story: Fred Ojambo in Kampala at fojambo@bloomberg.net

To contact the editor responsible for this story: Alastair Reed at areed12@bloomberg.net


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