Cuba - slashes tobacco land, demand for cigars down..

October 6, 2009 - 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.

Reference: Cuba slashes tobacco acreage amid flagging demand by Marc Frank (Editing by Tom Brown and Padraic Cassidy), Reuters, 10/5/2009.

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