There are 70 cigar factories in the country that produce close to 5,000 brands, and the sales they make to the U.S. surpassing the sales made in that country by companies from the Dominican Republic and Honduras.
Figures from the Cigar Association of America indicate that in 2018 Nicaragua exported 140 million cigars to the North American country, a figure surpassing the 95 million sold by companies in the Dominican Republic and the 75 million exported by Honduras. However, the goal of the Nicaraguan industry is to gain a greater presence in Europe, a market that until now has been dominated by products from Cuba.
In Panama, the Colon Free Zone established requirements for the issuance of special permits for the marketing of cigarettes, tobacco products and pharmaceuticals.
By means of Resolution No.008-2019, published in La Gaceta Oficial on April 25, 2019, it was informed that companies will have a maximum term of 120 calendar days to comply with the requirements of special permits for import, transfer, marketing, export and re-export of cigarettes and tobacco products.
Despite Nicaragua's political and economic crisis, tobacco exports in 2018 totaled $222 million, 10% more than in 2017.
Statistics from the Central Bank of Nicaragua (BCN) show that between 2017 and 2018 sales abroad under the free trade zone regime increased by $20 million, from $202 million to $222 million.
Pharmaceutical products, plastic, food preparations, sugar and confectionery, and electrical cables are the main products that are sold to companies in the Dominican Republic.
Figures from the information system "Trade between Central America and the Dominican Republic", compiled by the Business Intelligence Unit at CentralAmericaData: [GRAFICA caption="Clic to interact with the chart"]
In the first ten months of 2017, tobacco exports totaled $188 million, and the union of Nicaraguan producers estimates that by the end of the year they will have exceeded the annual goal of $218 million.
The $188 million generated from tobacco exports between January and October of this year represents 85% of the goal set by the tobacco industry for this year.
Premium cigars led Nicaraguan tobacco sales abroad in the first half of the year, registering a 19% increase over the same period in 2016.
Due in part to the promotion of several cigar brands that entered the US market before the first half of last year, tobacco sales increased from $81.7 million in the first half of 2016 to $96.9 million in the same period this year.
In 2016 5.5 million kilos of tobacco and tobacco waste were exported, equivalent in value to $59 million, 10% more than the value of exports in 2015.
In 2016 foreign sales of tobacco and tobacco waste generated $58,695,000, 10% more than the $53,382,000 generated in 2015.The volume of exports also grew in the period in question, although not as significantly as the value. In 2016 5,5 million kilos were exported, whereas the previous year the total amount exported was 5.1 million kilos.
In 2016 foreign sales of cigars grew by 11% over 2015, reaching $178 million, of which 84% were destined for the US market.
Figures from the General Directorate of Customs indicate that Honduras and Germany rank second and third in the list of target markets for Nicaraguan cigars.Between 2014 and 2016, growth was 10%, going from $148 million to $178 million.
The aim is to open markets in Europe and Asia in order to offset the decline projected in tobacco exports to the US because of new FDA regulations.
The goal of the Nicaraguan Cigar Association is to gain a "... 20% increase in sales to Europe, where a little less than 10% of the product is consumed, as the rest currently goes to the United States."
From August 8 premium handmade tobacco leaf cigars will be subject to the same regulation as cigarettes manufactured with additives.
A group of tobacco companies in Nicaragua will be holding meetings in the US with local companies who have invested in tobacco plantations and cigar factories in order to assess the impact of the entry into force of the new regulation.
The FDA is analysing changing the rules in order to apply the same rules for cigarettes manufactured with additives to premium handmade cigars and tobacco leaves.
Tobacco industry entrepreneurs from Nicaragua and Honduras, as well as the ambassadors of both countries to the United States, have expressed concern over the announcement that the FDA is preparing changes in regulation in order to treat cigars in the same way as cigarettes.
At the end of 2014, exports from free zones totaled $5,242 million, equivalent to 53% of total exports from the country.
The sectors that reported the most exports are medical and pharmaceutical products with 25%, textiles 24%; electrical products, with 14%; tobacco and derivatives, with 11%; footwear and components, with 9%.
The president of the Dominican Association of Free Zones, Jose Tomas Contreras, told elnuevodiario.com.do that "...
Increasing the amount of land planted, consolidating markets where there is already a presence and exporting cigars to China are part of the tobacco industry's goals for 2015.
It is expected that in 2015 tobacco exports will grow by 5% and reach new markets such as those in China, Morocco and other Middle Eastern countries, where it is estimated that cigars would be very well received.
The main export market for Nicaraguan cigars could change after the eventual reopening of trade between Cuba and the United States.
Nicaraguan cigars are consumed in over 70 countries worldwide, where they already faces competition from Cuban tobacco. Nicaraguan tobacco manufacturers believe that if the trade embargo is lifted and Cuban tobacco starts to enter the US market, increased competition will open up opportunities for increasing productivity in the sector and improving the product in terms of variety and quality.
In the department of Estelí, the main producing area, the price of land has risen, driven by increasing demand for areas in which to grow tobacco plants.
In 2013 cigar exports generated revenues in excess of $200 million and production achieved a 18% growth compared to the previous year, reflecting the good performance of the tobacco industry in the country.