JTI may buy more local tobacco leaves in 2021

Published October 20, 2020, 6:30 AM

by Chino S. Leyco

Cigarette-maker Japan Tobacco International (Philippines) Inc. (JTI) may further increase its procurement of locally produced tobacco next year to support famers reeling from the economic impact of the pandemic.

John Freda, JTI Philippines general manager

In a letter to the Department of Finance (DOF), John Freda, JTI general manager, said the company is studying the possibility of hiking its earlier 2021 programmed procurement of locally produced tobacco of 4.6 million kilograms.

For this year alone, JTI already raised its procurement program by one million kilograms, Freda said in his letter to Finance Secretary Carlos G. Dominguez III.

Under Republic Act No. 10351, cigarette manufacturers or sellers are required to buy at least 15 percent of their tobacco leaf raw material requirements from locally grown sources. 

Freda said JTI buys more than 15 percent of its tobacco leaf raw materials from Filipino farmers.

JTI’s plan was in response to the joint request of the DOF and Department of Agriculture for the cigarette firms to help support local growers and raise revenues for tobacco-producing provinces.

Earlier, Dominguez and Agriculture Secretary William Dar asked cigarette companies to increase their purchases of locally produced tobacco leaf. 

In their letter, Dominguez and Dar pointed out that the strict quarantines imposed to curb the spread of COVID-19 had constrained the marketing flow of food and other agricultural goods, including tobacco, which is among the most affected crops as it is a non-food commodity. 

According to Dominguez and Dar, a study has shown that “only 30 percent of the total local tobacco production are bought from the farmers while the rest are imported” by cigarette companies. 

 “Your kind assistance will translate into realized income to farmers, which assures food on their table

and revenues for local government units (LGUs),” they said in their letter addressed to JTI.

In response, JTI said its local team is coordinating with the company’s global leaf supply chain to “explore the possibility of further increasing our local leaf tobacco purchases next year and in the coming years.”

Moreover, Freda said that even before the receipt of the letter from the two Cabinet secretaries, JTI has also been coordinating with the National Tobacco Administration (NTA) on the same concern. 

 “The NTA initiated a series of meetings on the subject in anticipation of the next harvest and trading season which is expected to begin sometime in March 2021, with the goal of ensuring that all harvest next year will be procured,” Freda said in his letter to the two Cabinet officials. 

Freda assured Dominguez and Dar that “JTI Philippines is committed to support the Philippine government and the local tobacco farmers.”