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Leaf
tobacco is marketed in different ways throughout the world, but in all instances the grade selection and
establishment of price has to be done by a corps of experienced tobacco experts. Because tobacco is a perishable
commodity, it has to be processed quickly following its purchase to avoid deterioration.
Using the services of a merchant such as Universal, a manufacturer can be assured complete worldwide market
coverage. With few exceptions (most notably in the United States), the world's manufacturers of tobacco
products leave the selecting, buying, and processing to leaf dealers, who service huge accounts from country
to country. Leaf merchants provide manufacturers with lower cost services due to their economies of sale.
A tobacco merchant's business takes different forms with different customers. In some cases, a merchant
selects, buys, and delivers the leaf to the customer for an agreed-upon commission. In other cases, a
tobacco merchant will both purchase and process tobacco based on a customer's pre-season order. On some occasions
immediate delivery and payment are made. In others, a leaf merchant finances the manufacturer until the
time of delivery. Finally the merchant may also buy for its own account for later sale. In such cases the tobacco
is stored until needed.
In the United States, the process of turning raw tobacco leaves from the fields into a finished product
such as cigarettes, cigars, pipe tobacco, snuff, and chewing tobacco begins when the farmer harvests the crop
and separates it into rough grades. U.S. government standards provide for eight grades of tobacco and six qualities
within each grade. There are eighteen different tobacco colors, plus several combinations of colors, making the
various choices of colors, qualities, and types of tobacco number in the thousands. The manufacturer's or
merchant's buyers acquire tobacco either by contracting directly with the farmer or on the warehouse auction
floors through the process of competitive bidding with other purchasers. After purchase, the tobacco is
transported to the processing plants where it is cleaned, sorted, regraded, and threshed to remove the stem
from the lamina. There its moisture content is stabilized and it is packed, either to be stored
for future sale or to be shipped directly to the customer.
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Source: Tobacco Merchant, Maurice Duke and
Daniel P. Jordan, The University Press of Kentucky, 1995. |
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