A steady decline in raw tobacco production has reduced world volumes enough to bring demand back in line with supply, said Universal Corp Chief Executive Officer George Freeman.

"While we believe that total production levels have largely moved into balance with anticipated demand, imbalances in certain leaf quality styles or types remain, and our customers' inventory composition and durations may also impact their near-term demand requirements.” Freeman’s remarks came as the independent leaf merchant announced fiscal-year earnings.
Reduced plantings this year as growers react to low prices and adverse weather triggered by El Nino will reduce Universal purchases and sales in the current fiscal year, the company said. Universal said volume should recover in its next fiscal year.
Tobacco segment operating income in the 12 months to 31 March rose nearly USD 19 million to USD 186 million (EUR 167 million), of which more than USD 80 million occurred in the final business quarter. “Although it is still early in the season, we currently anticipate that customer-mandated shipment timing will continue to be weighted toward the second half of the year,” Freeman said. Consolidated tobacco revenue at USD 2.1 billion for the year was down USD 151 million.