Philip Morris International (PMI) said on Monday it had reached deals with Alliance One International and Universal Leaf Tabacos Limitada to buy tobacco leaf directly from some 17,000 farmers in southern Brazil.

According to a Reuters report, PMI's Brazil affiliate, Philip Morris Brazil (PMB), said the tobacco purchased in the new arrangement will account for about 10 per cent of its global supply needs and will allow the company to improve cost efficiencies and better align its supply with market demand.
Alliance One said in a statement that its Brazilian subsidiary Alliance One Brasil Exportadora de Tabacos (AOB) will assign to PMB contracts with approximately 8,500 tobacco farmers in southern Brazil, sell some of its related assets, and will license to PMB its proprietary inventory management software. In addition, AOB will process tobacco for PMB grown by PMB's contracted farmers. AOI will continue to supply Brazilian processed tobacco to PM as required to complement PM's needs.  
The deals are subject to Brazilian government approval and are expected to be completed by the end of the third quarter. (pi)