ANL 14.30 Decreased By ▼ -0.26 (-1.79%)
ASC 13.90 No Change ▼ 0.00 (0%)
ASL 15.33 Decreased By ▼ -0.49 (-3.1%)
AVN 102.99 Decreased By ▼ -3.78 (-3.54%)
BOP 8.75 Increased By ▲ 0.05 (0.57%)
CNERGY 7.16 Increased By ▲ 0.09 (1.27%)
FFL 9.68 Decreased By ▼ -0.08 (-0.82%)
FNEL 9.41 Decreased By ▼ -0.44 (-4.47%)
GGGL 15.30 Decreased By ▼ -0.20 (-1.29%)
GGL 23.31 Decreased By ▼ -0.50 (-2.1%)
GTECH 10.36 Decreased By ▼ -0.14 (-1.33%)
HUMNL 6.68 Decreased By ▼ -0.10 (-1.47%)
KEL 3.31 Decreased By ▼ -0.02 (-0.6%)
KOSM 4.53 Decreased By ▼ -0.05 (-1.09%)
MLCF 34.10 Decreased By ▼ -0.75 (-2.15%)
PACE 4.57 Decreased By ▼ -0.07 (-1.51%)
PIBTL 7.56 Decreased By ▼ -0.11 (-1.43%)
PRL 15.09 Decreased By ▼ -0.06 (-0.4%)
PTC 9.29 Increased By ▲ 0.02 (0.22%)
SILK 1.53 Decreased By ▼ -0.02 (-1.29%)
SNGP 34.52 Increased By ▲ 0.03 (0.09%)
TELE 18.09 Decreased By ▼ -0.26 (-1.42%)
TPL 16.10 Decreased By ▼ -0.15 (-0.92%)
TPLP 30.40 Decreased By ▼ -0.95 (-3.03%)
TREET 41.40 Decreased By ▼ -0.48 (-1.15%)
TRG 103.90 Decreased By ▼ -0.05 (-0.05%)
UNITY 28.50 Decreased By ▼ -1.05 (-3.55%)
WAVES 15.80 No Change ▼ 0.00 (0%)
WTL 2.47 Decreased By ▼ -0.03 (-1.2%)
YOUW 8.28 Decreased By ▼ -0.02 (-0.24%)
BR100 4,715 Decreased By -13.6 (-0.29%)
BR30 19,257 Decreased By -290.2 (-1.48%)
KSE100 45,763 Increased By 0.3 (0%)
KSE30 17,999 Decreased By -2.8 (-0.02%)

coronavirus
Coronavirus
VERY HIGH
Source: covid.gov.pk
Pakistan Deaths
29,012
924hr
Pakistan Cases
1,324,147
4,02724hr
Sindh
499,830
Punjab
452,261
Balochistan
33,699
Islamabad
110,963
KPK
182,199

While the country’s top cigarette manufacturers have posted strong bottom lines lately, the cigarette production, as captured by official data, has shown single-digit growth in the first half of CY21. As per the latest data from the Pakistan Bureau of Statistics, the formal sector’s cigarette output totaled 26.4 billion sticks between January and June 2021, a growth of 9 percent compared to the same period last year.

Average cigarette production came in at 4.4 billion sticks in 1HCY21, which is higher than last year but still lower than the 5 billion peak seen in 2018 and 2019. Monthly production touched 5.4 billion sticks in March, but it has come down in later months. For instance, in June, the month of budget announcement, some 2.7 billion sticks were produced, the lowest monthly production level since June 2019.

The top two producers have done well in 1HCY21. Pakistan Tobacco, the market leader, saw net turnover jump 18 percent year-on-year to Rs37 billion, with net profit surging 24 percent to Rs9 billion. Philip Morris, the second-ranked player, increased its bottomline by 37 percent year-on-year to Rs1.7 billion, as savings in manufacturing costs and administrative overheads amplified the 5 percent gain in net turnover, which reached Rs9.2 billion in the first half of this year.

At the current pace, the documented tobacco sector will produce some 53 billion cigarette sticks in the entire CY21. The sector has previously demonstrated an actual manufacturing capacity to produce at least 60 billion sticks per annum. However, there are constant complaints from leading tobacco players that they are not getting an even playing field due to some tobacco companies evading duties and taxes.

As per Pakistan Tobacco, duty-non-paid cigarettes had market share of 37.6 percent as of May 2021. Philip Morris Pakistan recently estimated that illicit cigarettes had 40 percent market share. Illicit brands are said to be considerably low-priced compared to taxed and duty-paid brands. The latest budget was neutral for the formal tobacco sector, as there was no change in FED rates or in the FED structure. While this is expected to support formal sector a bit, there is no way around cracking down against illegal sales.

Comments

Comments are closed.