Market evolution: Light air-cured tobacco (CN 24012035) — 2015–2025

Introduction

This report analyses the European Union's external trade in partly or wholly stemmed or stripped light air-cured tobacco (customs code 24012035) over the period 2015–2025. The EU is a major net importer of this raw material, which serves as a key input for its domestic cigarette and tobacco manufacturing industry. Over the decade, the market underwent three notable structural shifts: a pronounced price–volume divergence in both imports and exports, a substantial reorientation of sourcing patterns toward Sub-Saharan Africa and South Asia, and a growing concentration of trade flows—both by partner country and among EU Member States. Against a backdrop of declining net import reliance and a rapid build-up of domestic production—driven primarily by Belgium—the EU has nonetheless remained deeply dependent on a small number of overseas suppliers, exposing the bloc to elevated supply-chain volatility.

1. Rising unit values amid stagnant volumes: a value-over-volume growth story

The overall headline figures for 2015–2025 reveal a market in which value growth significantly outpaced volume growth, reflecting a sustained increase in unit prices. This dynamic shaped both the import and export sides of the market.

1.1 Imports: value up, volumes down

EU imports of light air-cured tobacco rose modestly in value—from €763.8 million in the first period to €828.0 million in the last (+8.4%)—while import volumes actually contracted from 142,076 tonnes to 136,847 tonnes (−3.7%). The gap was filled by a 12.6% increase in the average import price, which climbed from €5,376 to €6,051 per tonne. Import volumes peaked at 142,076 tonnes in 2015 and subsequently fluctuated, falling to a trough of 100,150 tonnes before partially recovering. Import values hit a low of €437.3 million before rebounding to their 2025 level, which also marked the period maximum (general overview).

1.2 Exports: strong value growth despite modest volume gains

EU exports followed a similar value-over-volume pattern but with more pronounced growth on both fronts. Export values surged from €176.6 million to €276.7 million (+56.7%), while volumes grew only 7.9% (from 30,508 to 32,904 tonnes). The unit export price rose 45.3%, from €5,788 to €8,410 per tonne—the highest level in the period. This suggests that the EU is increasingly exporting higher-value processed or quality-tier tobacco, or alternatively that global price inflation in this commodity has disproportionately benefited European re-exports.

1.3 A structural price shift

The fact that both import and export unit prices rose substantially, but export prices rose faster (45.3% vs. 12.6%), narrowed the historical price differential between EU imports and exports. In 2015, export prices were 7.7% above import prices; by 2025, the gap had widened to 39.0%. This could reflect a shift in the quality composition of trade—whereby the EU imports lower-grade leaf and re-exports processed or selectively graded product—or simply the pricing power of EU-based traders on certain destination markets.

2. Geographic reorientation: African consolidation, Asian emergence, and transatlantic decline

One of the most striking features of the 2015–2025 period is the dramatic reshuffling of the EU's supplier base. The traditional dominance of the Americas has given way to a much stronger position for Sub-Saharan Africa and, increasingly, South Asia.

2.1 Malawi and Mozambique anchor the African supplier bloc

Malawi remained the EU's single largest import source throughout the period, with shipments rising from €212.7 million to €308.1 million (+44.8%). Mozambique, the second-largest African supplier, grew from €128.6 million to €158.8 million (+23.5%). Together, these two countries accounted for roughly €467 million in 2025—more than half of all EU imports by value. Both are long-established flue-cured and fire-cured tobacco producers, and their consolidated position reflects sustained investment by multinational leaf merchants in Southern and East African supply chains.

2.2 India: the decade's fastest-growing supplier

The most dramatic growth story in the data is India. EU imports from India surged from €16.7 million to €124.1 million—a staggering 643.7% increase—making India the EU's third-largest supplier by value in 2025. India overtook both Brazil and the United States during the period. This growth likely reflects India's large-scale expansion of Virginia (flue-cured) tobacco production in Andhra Pradesh and Karnataka, combined with competitive pricing. However, India's import volatility is also notably high (coefficient of variation: 0.78), indicating that this supply relationship remains somewhat erratic from year to year (volatility analysis).

2.3 Brazil and the United States: declining transatlantic suppliers

Brazil, once a top-tier supplier, saw its exports to the EU fall from €101.1 million to €45.2 million (−55.3%). The decline was even more dramatic for the United States, which collapsed from €110.2 million to €32.3 million (−70.7%). These contractions may reflect a combination of factors: shifts in global demand patterns redirecting Brazilian and American leaf toward Asian markets, currency effects, and possibly EU regulatory or sustainability-driven sourcing preferences that favour African or Asian origins.

2.4 The export side: Türkiye and Russia dominate, Philippines emerge

On the export side, Türkiye was the EU's largest customer, growing from €44.5 million to €95.9 million (+115.6%). The Russian Federation followed, rising from €38.6 million to €71.3 million (+84.5%). The Philippines emerged as a notable new destination, with EU exports soaring from €1.3 million to €23.4 million (+1,740.9%). Meanwhile, exports to Switzerland (−72.7%), Ukraine (−46.0%), and Portugal (−90.8% as a re-exporter) declined significantly (top partners).

3. Rising concentration, Belgian dominance, and growing supply-chain fragility

The final key dynamic of the decade is the increasing concentration of both trade flows and production within the EU, paired with a modest but meaningful reduction in overall import dependence. These trends carry implications for the EU's supply-chain resilience.

3.1 Growing concentration on both sides

The Herfindahl–Hirschman Index (HHI) for imports by value rose from 1,519 to 2,085 (+37.3%), indicating that the EU's import base became significantly more concentrated over the period. The export HHI followed a similar trajectory, rising from 1,341 to 2,025 (+51.0%). Both readings now sit above the commonly cited 1,800 threshold that signals moderate concentration (concentration analysis). In practical terms, this means the EU is increasingly reliant on a smaller number of dominant suppliers—principally Malawi, Mozambique, and now India—for its tobacco leaf imports.

3.2 Belgium as the EU's central hub

Within the EU, Belgium emerged as the undisputed centre of light air-cured tobacco trade. Belgian imports surged from €231.5 million to €340.6 million (+47.2%), while Belgian exports soared from €71.1 million to €170.4 million (+139.9%). Belgium's revealed symmetric comparative advantage (RSCA) stood at 0.772 in 2025, confirming its strong specialisation in this product. Belgium now accounts for 65.8% of EU production by volume. Poland also saw rapid growth (+147.8% in imports), while Germany, the Netherlands, and Romania experienced significant declines as importing hubs (top reporters).

3.3 EU production surge and declining import reliance

EU domestic production of light air-cured tobacco more than doubled in volume (from 19,069 tonnes to 42,932 tonnes, +125.1%) and tripled in value (from €76.3 million to €229.3 million, +200.3%). This expansion—driven largely by Belgium and, to a lesser extent, Greece and Bulgaria—helped reduce the EU's net import reliance from 93.8% to 87.8% (−6.4 percentage points). Despite this progress, the EU remains overwhelmingly dependent on external suppliers: nearly nine out of every ten tonnes consumed are imported.

3.4 Volatility and vulnerability

Several supply relationships exhibit significant volatility. India's import coefficient of variation stands at 0.78, and that of the United States at 0.57, signalling unpredictable year-to-year flows (volatility bars). Two notable shock events were detected: a price shock in EU exports to Switzerland in 2018 (abnormality score: 38.9) and a price shock in EU imports from Bangladesh in 2022 (abnormality score: 6.2). Meanwhile, export propensity collapsed from 997.0% to 385.3% (−61.3%), suggesting that while the EU is re-exporting significant volumes, the ratio of exports to domestic production has fallen sharply as production has expanded faster than export growth. The trade intensity index also declined from 134.5% to 123.7% (−8.0%), confirming a modest de-internationalisation of the EU's tobacco leaf market.

Conclusion

Over the 2015–2025 decade, the EU's light air-cured tobacco market evolved along three principal axes. First, the value of trade grew much faster than volume, as unit prices rose sharply—particularly on the export side (+45.3%)—reflecting either quality upgrading, global commodity inflation, or both. Second, the EU's sourcing geography was fundamentally reshaped: the steep decline of Brazil and the United States as suppliers was more than offset by the rise of India (+643.7%) and the consolidation of Malawi and Mozambique, concentrating the import base in fewer, but larger, African and Asian origins. Third, the dramatic expansion of EU domestic production—more than doubling in volume, led by Belgium—partially reduced import dependence but also centralised the bloc's internal supply chain around a single Member State.

These trends carry a dual message for policymakers and industry stakeholders. On the one hand, the EU has made tangible progress in reducing its import reliance and building domestic capacity. On the other, rising concentration indices (HHI above 2,000 on both import and export sides), high volatility among key suppliers, and Belgium's dominant position create new vectors of fragility. Diversification of both supplier countries and EU-internal production bases would be prudent steps to mitigate these risks in the years ahead.