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.
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.
Preparations are being made for a trip by a group of companies traveling from April 20th to 24th to the South American country to explore business opportunities under the trade agreement which has been in force since 2012.
This trade mission's main objective is to make the most of the existing free trade agreement with Chile, to create business opportunities especially for the food and tobacco industries.
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.
A bill to subsidize the production of peanuts in the U.S. and an initiative that would restrict imports of machine-made tobacco has caused concern in the private sector.
The agricultural bill and the initiative sent to consultation by the FDA in the United States includes the establishment of $10 as the price parameter for classifying cigars as premium and in the case of peanuts, raising production of grain by 30% through the application of an agricultural subsidy.
The goal proposed by producers for 2014 is to sell to the rest of the world 150 million cigars, replacing the Dominican Republic as the number one global exporter.
The secretary of the Association of Nicaraguan Cigar makers, Leonel Raudez, said exports have grown rapidly, from 16 million in 1996 to 102 million in 2011. This figure means that the country displaces Honduras as the largest exporter in the region.