Market evolution: Raw tobacco (CN 2401) — 2015–2025

Introduction

The European Union is one of the world's largest consumers of tobacco products, and its external trade in unmanufactured tobacco (CN 2401) — covering unstemmed leaf, stemmed or stripped leaf, and tobacco refuse — provides a window into the structural forces reshaping the global leaf market. Over the 2015–2025 period, the EU's trade in raw tobacco has been characterised by a clear pattern: monetary values have grown substantially while physical volumes have remained broadly flat or even declined, signalling a pronounced price escalation. At the same time, the geography of supply has shifted — with African and Asian origins gaining ground at the expense of some traditional Western Hemisphere suppliers — and EU domestic production has staged a notable rebound. This report examines these dynamics in three sections, drawing on the available trade, production, and concentration data for the period.

1. A price-driven market: values rise while volumes stagnate

EU imports grew in value but barely in volume

Between 2015 and 2025, EU imports of raw tobacco rose from €2.63 billion to €3.29 billion (+25.2%) in value, yet the underlying volume moved only from 565,570 t to 583,768 t (+3.2%). The bulk of the value increase is therefore attributable to rising unit prices: the average import price climbed from €4,644/t to €5,632/t (+21.3%).

Source: General Overview – trade

EU exports experienced an even sharper price effect

EU exports tell an even more dramatic story. Export value rose from €969 million to €1.36 billion (+40.9%), yet volumes actually fell from 172,244 t to 162,956 t (−5.4%). The average export price surged from €5,624/t to €8,375/t (+48.9%), meaning EU exporters shipped less tobacco at considerably higher unit values. This likely reflects a mix of inflationary cost pressures, tighter global supply, and possibly a compositional shift toward higher-quality or more processed leaf.

The trade deficit widened despite falling import reliance

The EU's trade deficit in raw tobacco widened from −€1.66 billion to −€1.92 billion (−16.0%). Importantly, this happened even as net import reliance declined from 93.8% to 87.8% (−6.4 percentage points). The explanation is straightforward: while the EU has reduced its proportional dependence on imported leaf — partly through increased domestic production — the price inflation on those imports has more than offset the volume effect, driving the deficit higher in absolute terms.

Sub-product analysis confirms the price trend across all categories

Breaking imports down by sub-product, the stemmed/stripped category (CN 240120) — which accounts for the lion's share of import volume — saw prices rise from €5,763/t to €6,771/t (+17.5%), while volumes edged up from 387,278 t to 416,906 t (+7.6%). Unstemmed leaf (CN 240110) prices jumped from €5,191/t to €7,473/t (+44.0%), even as volumes declined from 59,876 t to 47,023 t (−21.5%). Tobacco refuse (CN 240130), though a lower-value segment, also saw its price climb from €709/t to €951/t (+34.0%) with volumes broadly stable.

2. Geographic realignment: African and Asian origins gain, traditional suppliers recede

Brazil remains the dominant supplier, but its share is eroding

Brazil was and remains the EU's single largest source of raw tobacco imports, valued at €654 million in 2025 (+11.2% vs. 2015). However, its growth rate is modest compared to several competitors, suggesting a gradual diversification of EU sourcing. The concentration index (HHI) for imports by value declined from 996 to 898 (−9.9%), confirming that the import base has become somewhat less concentrated.

India and Malawi recorded the strongest growth among major suppliers

The most striking import developments over the decade are the surges from India (from €184 million to €389 million, +110.9%) and Malawi (from €247 million to €362 million, +46.5%). India's growth reflects both expanding production capacity and its competitive pricing in the stemmed-leaf segment, while Malawi's rise aligns with its established position as a leading Burley origin.

Source: Partners – imports

The United States lost ground as a supplier

In contrast, imports from the United States fell from €357 million to €260 million (−27.0%). This decline is consistent with the long-term contraction of US flue-cured and Burley acreage, rising domestic regulatory costs, and the growing competitiveness of origins in Sub-Saharan Africa and South Asia. US-origin leaf also carries a volatility coefficient of 0.283, among the higher readings for EU import partners, suggesting that supply flows from the US have been relatively erratic year-on-year.

EU exports shifted decisively toward Russia and Turkey

On the export side, the EU's outbound trade has been reoriented toward Russia (from €159 million to €256 million, +61.4%) and especially Turkey (from €69 million to €175 million, +152.2%). Taiwan also emerged as a fast-growing destination (from €12 million to €54 million, +341.3%). Meanwhile, exports to Japan (−35.6%), Switzerland (−39.4%), and the United States (−28.1%) all contracted, in some cases quite sharply. The Japan corridor was also the most volatile export route, with a coefficient of variation of 0.679 — the highest among all tracked partners — reflecting large year-to-year swings. Several price shocks were detected along export corridors, including an abnormal price event on the EU–Jordan route in 2023 (abnormality score: 12.6, shift: +38.4%) and a notable EU–Japan price spike in 2019 (abnormality: 6.3, shift: +23.7%).

Within the EU, Belgium consolidated its role as the main trade hub

Belgium emerged as the EU's dominant gateway for both imports and exports of raw tobacco. Belgian imports surged from €595 million to €962 million (+61.6%), making it the largest EU importing Member State by 2025 — overtaking Germany, which saw its imports fall from €651 million to €563 million (−13.5%). Belgium's export growth was equally striking, rising from €322 million to €600 million (+86.6%). This dual expansion reflects Belgium's role as a logistics and processing hub (the port of Antwerp being a key entry point for leaf destined for re-export after processing). Other notable developments include Greece's import surge (+194.1%) and Poland's dramatic export expansion (+478.2%), the latter likely linked to the growth of cigarette manufacturing capacity in Poland.

Source: Reporters – imports and exports

3. Domestic production rebounds and specialisation patterns emerge

EU tobacco production more than doubled in volume and tripled in value

One of the most consequential structural shifts visible in the data is the strong rebound of EU domestic production. Production quantity rose from approximately 19.1 million kg to 42.9 million kg (+125.1%), while production value surged from €76.3 million to €229.3 million (+200.3%). This outpaced the rise in traded volumes and partly explains the decline in net import reliance noted earlier. The higher growth in value than in quantity also points to increasing unit prices for domestically grown leaf, consistent with the broader inflationary environment observed across traded flows.

Southern and South-Eastern EU members drive the production recovery

The specialisation data for 2025 reveals which Member States retain a comparative advantage in raw tobacco. Greece leads with an RSCA index of 0.878 and an RCA of 15.4, reflecting the enduring importance of oriental tobacco in Greek agriculture. Croatia (RSCA 0.746), Bulgaria (RSCA 0.703), and — perhaps surprisingly — Belgium (RSCA 0.658) follow. Belgium's high specialisation score is not indicative of significant domestic cultivation; rather, it reflects its outsized role as an entrepôt for re-export of processed leaf, as discussed above. Italy (RSCA 0.327) maintains a moderate specialisation linked to traditional growing regions.

*Belgium's large production share likely reflects re-processing and staging rather than primary cultivation.

Export concentration increased, signalling consolidation in outward trade

While import-side concentration declined (HHI from 996 to 898), export-side concentration rose (HHI from 670 to 767, +14.6%). This indicates that EU export flows have become more concentrated on fewer destinations — principally Russia and Turkey — even as imports have diversified. This asymmetry carries a strategic implication: while the EU has reduced its sourcing vulnerability by broadening its supplier base, its export exposure has narrowed toward a smaller set of buyers, some of which (notably Russia) are subject to geopolitical uncertainty.

Trade intensity and export propensity declined, consistent with a more self-referential market

Trade intensity fell from 134.5% to 123.7% (−8.0%), and export propensity dropped sharply from 997.0% to 385.3% (−61.3%). The decline in export propensity — which measures the ratio of exports to domestic production — is particularly noteworthy. It suggests that a growing share of EU-produced or EU-processed tobacco is being absorbed domestically rather than re-exported, or alternatively that the production rebound has outpaced the growth in export capacity. Either way, the EU's raw tobacco market is becoming somewhat more inward-looking over the period.

Conclusion

The EU's trade in raw tobacco (CN 2401) between 2015 and 2025 has been shaped by three converging forces: persistent price inflation that has pushed trade values upward even as physical volumes remain constrained; a geographic realignment of supply toward Sub-Saharan Africa and South Asia, partially offsetting the decline of traditional suppliers like the United States; and a rebound in EU domestic production that has modestly reduced import dependence. The trade deficit has nonetheless widened to nearly €2 billion, driven entirely by price effects. Looking ahead, the increasing concentration of EU export flows on a small number of destinations — notably Russia and Turkey — introduces a vulnerability that contrasts with the greater diversification achieved on the import side. Meanwhile, the continued growth of Belgian and Polish trade figures underscores the evolving role of EU logistics and manufacturing hubs in the global tobacco leaf value chain.