Cuts in tobacco production have reduced oversupply in global markets to where burley tobacco supply is balanced with demand, according to independent leaf merchant Universal.

"As we enter the second (fiscal) year of the global leaf oversupply, we are seeing progress in moving towards more balanced markets. Production has come down in most origins. Burley tobacco supply is now balanced, while supply continues to exceed demand for certain qualities and stalk positions of flue-cured tobacco,” said Universal Chief Executive Officer George Freeman. “Although global oversupply conditions have improved, based on customer shipment indications, we believe that volumes will be heavily weighted towards the second half of the fiscal year, similar to last year's trend.”
Universal reported an operating income loss from tobacco operations of USD 3.5 million (EUR 3.2 million) in the three months to 30 June, an improvement from a USD 7.6 million loss for the same period last year. Tobacco sales of USD 275.4 million were about USD 4 million more than last year, the company said in its first-quarter earnings statement.