Cuba reducing tobacco production

[DirtyDave]

I saw this article today and thought it would be good to share with everyone here. It looks like due to the economic decline that Cuba has been experiencing more severely lately, they are reducing their tobacco production by about 30%.

Reduced supply, increased demand? We'll see I guess. Wish I had more money to do some stocking up.

 

[bfreebern]

I'd say, reduced production = increased prices.

 

[DirtyDave]

Can't argue with that! Hope it isn't too much.

 

[thechenman]

I'd say, reduced production = increased prices.

Forget about that. HSA has been raising prices long before production was cut. So, even if production wasn't cut, you should expect to see higher prices. The problem here is the finance guru's haven't figured out that cigars are ultimately a commodity, a luxury item. When the economy is weak and people are losing their job, they spend less on what are deemed expensive luxury items. What they need to get through their thick skulls is that in order to hit revenue targets/projections, they sometimew will need to sacrifice margin for volume. They can always recoup the margins at a later date, but for now they can do something that consumers of their prodcut would appreciate, and will keep more consumers smoking fine Cuban cigars. To boot HSA makes itself look good. It's win-win for everyone, at least ultimately.

 

[Macion Grey]

Man, I hope this doesn't get ridiculous fast, as these things can tend to do.

Better get a bigger humidor.

 

[Johnny-O!]

1)If they reduced the crops by 30% to slow down the warehousing of unwanted cigars like the Open line they could dedicate more manpower to........?

A) Communism classes for the general public to revive the revolution and make everybody feel good

B) "Dumping" the cigars that are at the port waiting to ship that had the orders cancelled

C) Concentrating on medium priced cigars without sacrificing quality

D) Get the Altadis boys in at the local Ju-Co to take some marketing classes

 

[DirtyDave]

Thanks John. It will be interesting to see what happens.

 

[thechenman]

Apparently according to Suckling's latest blog the cut in tobacco production will only affect cigarettes, not cigars. I don't quite understand the math on this, but they say 30% less plainting would only result in 15% less yield. Also the premium cigar growing regions would not see a cut in production. Cigar leaf production remains high in order for the Cubans to build an inventory of leaf to be used in different blends.

 

[LockOut]

I

Apparently according to Suckling's latest blog the cut in tobacco production will only affect cigarettes, not cigars. I don't quite understand the math on this, but they say 30% less plainting would only result in 15% less yield. Also the premium cigar growing regions would not see a cut in production. Cigar leaf production remains high in order for the Cubans to build an inventory of leaf to be used in different blends.

Do they use idfferent tobacco for the two. For some reason and it may soudn silly i was under the impression that i read that they used 2nd grade cigar stuff for the cigarettes.

 

[Doc Wylie]

We can only hope that the counterfeit producers will pick up the slack. :whistling:

 

[Yeahthatsme]

I

Apparently according to Suckling's latest blog the cut in tobacco production will only affect cigarettes, not cigars. I don't quite understand the math on this, but they say 30% less plainting would only result in 15% less yield. Also the premium cigar growing regions would not see a cut in production. Cigar leaf production remains high in order for the Cubans to build an inventory of leaf to be used in different blends.

Do they use idfferent tobacco for the two. For some reason and it may soudn silly i was under the impression that i read that they used 2nd grade cigar stuff for the cigarettes.

Yep. Cigarette tobacco is actually a different type than that used in cigars.


As far as Suckling's commentary, I honestly don't trust a word the man says, and never will. The best we can do is wait and see what comes of this in the coming years.

 

[thechenman]

We can only hope that the counterfeit producers will pick up the slack.

Bring on the Glass Top Cohibas...people will be lining up to get there hands on some...