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Los Angeles, December 14 – This will not come as a shock to some of you, but the U.S. Government can’t count.

Cigar import statistics compiled by the Cigar Association of America (CAA) from data compiled by the Foreign Trade Division of the Bureau of the Census continue to be way off for the year. The current data describes a cigar free-fall in which premium cigar imports are down by 26% for the first nine months of the year. Yet, the cigar-selling giants such as Altadis U.S.A., Davidoff and Swedish Match all report robust sales in 2006.

The CAA noted that “we believe the data on imports from the Dominican Republic as reported by the government is seriously understated by 25 million (30 million for the first six months alone.) We have notified the FTD - Foreign Trade Division and we are awaiting their response.”

As it is, the figures for September show a drop of 22.5% in premium cigar imports to the U.S. to go along with the 26% annual decline in 2006, all directly related to the figures from the Dominican Republic.

Imports from the other two big exporters to the U.S. – Honduras and Nicaragua – continued to be strong:

• Honduran imports were way up in September over 2005 by 20% and for the year are now ahead of 2005 just slightly by 2% to 61.57 million.

• Nicaraguan imports were down in September by 22% against 2005 but are still ahead for the year (nine months) by 3%, at 38.4 million.

Almost no other country has any share of the U.S. market. The next largest exporter to the U.S. is Mexico, but with only 106,000 cigars coming in during September, it’s barely noticeable.

After the CAA received revised figures for cigar imports from 1997-2005, it’s apparent that after the end of the Cigar Boom in late 1998, imports dropped off significantly only in 1999 and 2000 and began rebounding strongly after that. A tiny increase in 2000 was the calm before strong gains in imports in 2001 and 2002, a flat year in 2003 and a rush past 300 million in 2004 and up to 320 million in 2005. No one knows where 2006 will turn out . . . because no one has an accurate count!

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Funny, I received this the other day:

December 2006, ERS-TBS-2006

Approved by the World Agricultural Outlook Board
This SUMMARY is published by the Economic Research Service, U.S. Department
of Agriculture, Washington, DC 20036-5831. The text of the yearbook will be
available electronically about 1 week following this summary release.

Tobacco Acreage in 2006 Up 12 Percent

As of October 2006, total tobacco acreage for the 2006 marketing year was
estimated to have advanced 12 percent from 2005 to 334,300 acres, about
36,000 acres over last season. Yields for all types of tobacco averaged
2,194 pounds per acre, exceeding last year's yields by 23 pounds per acre.
Production of all types is estimated at 733.6 million pounds, about 86
million pounds above last season. In 2005, production dropped over 230
million pounds from the previous season.

Based on January 2006 estimates, 92 percent of U.S. leaf was of types used
for cigarettes, 1 percent more than last season. Cigar leaf, also used for
other products such as chewing and smoking tobacco, accounted for 1 percent
of production. Other types, mostly dark air- and fire- cured leaf,
accounted for 7 percent of production, slightly less than last season.

Unmanufactured tobacco exports advanced 15 percent during January-September
2006. Shipments were 260.3 million pounds (declared weight), compared with
226.8 million pounds during the same period in 2005. Value advanced 10
percent, ending at $739.8 million. Flue- cured volume surged 64 percent and
burley slipped 3 percent. Shipments of fire-cured, Maryland (type 32) leaf,
cigar binder, and stems advanced. Exports of other types declined.
Shipments to China were responsible for the strong flue-cured shipments.

Unmanufactured tobacco imports (consumption) for January-September 2006
increased 19 percent, reaching 437.2 million pounds (declared weight). Last
year, January--September import volume reached 367.2 million pounds.
General imports slipped 13 percent after gaining the previous year. Stocks
of imported cigarette leaf were 1 percent higher on October 1, 2006, than a
year earlier at 745.7 million pounds (farm-sales weight).

U.S. cigarette output in 2005 was 489.0 billion cigarettes, down 1 percent
from 2004, the same decline as last year. For 2006, expected output is
about 496.4 billion pieces, also a 1-percent drop. Domestic consumption in
2005 slid 3 percent to 376 billion cigarettes. Consumption in 2006 is
expected to shrink 1 percent, to 371 billion pieces. During the first 9
months of 2006, 82.5 billion cigarettes were shipped overseas, compared
with 84.0 billion during the 9-month period in 2005. Year-end shipments are
expected to be about 115 billion cigarettes. During January-September 2006,
cigarette imports slipped to 10.8 billion pieces, compared with 13.9
billion pieces during the same 9-month period last year.

The 2006 Tobacco Situation and Outlook Yearbook includes the article
Changing Economic Forces in Tobacco Markets Altered Tobacco Returns,
1996-2004 by Linda F. Foreman

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