ULT Hungary Pte Ltd of Hungary, a member of the Universal Tobacco business concern, is intending to process this year 500 tonnes of tobacco cultivated in Romania.
This initiative is said to be to the advantage of both the Hungarian company and Romanian farmers, who this way will increase their output, which in 2007 reached some 13% of the quota awarded by the European Commission to Romania.
"Had it not been for the Hungarian company, we would have no longer cultivated tobacco," says a tobacco farmer of the central Romanian county of Mures, who also says he is happy with the 0.75 euro/kg price he gets from ULT. He also says he is happy that ULT pays out for the tobacco within three days after delivery, unlike the Romanian tobacco processors with whom he had previously concluded contracts and who would pay six months after delivery.
Adviser with the Ministry of Agriculture and Rural Development Paula Craioveanu says the Romanian farmers selling their yields to ULT receives 0.75 euro per kilogram, and an additional 2 euro per kilogram and 50 euro for each hectare of land cultivated with tobacco.
ULT is also acquiring tobacco form the north-western area of Satu Mare, and the central areas of Alba Iulia, Aiud and Ludus.
ULT is also contemplating expanding its Romanian business to include the country’s eastern province of Moldavia.
Annual tobacco consumption stands at 40,000 tonnes, for a production of 1,550. Most of it is covered by imports in the shape of processed tobacco and cigarettes.
In 2007, Romania imported 28,861 tonnes of tobacco for approximately 97.7 million euros, 11,539 tonnes from the European Union for 3.62 euros per kg and 17,322 tonnes for an average price of 3.23 euros per kg from outside the EU.
The tobacco crops quota awarded to Romania is 12,312 tonnes a year.