Tobacco Supply at Risk: Climate Challenges and Sourcing Solutions

Andy Paterson • June 23rd, 2025.

Tobacco is the most widely grown non-food crop. It is grown in more than 100 countries, preferring a mild, sunny climate. Tobacco is a prized crop as it demands a high price. In the U.S., for example, where it is a controlled crop, an acre of tobacco sells for substantially more than any other acre of crop or pasture. 

While tobacco is adaptable to many soils and climates, growers face climate risks as extreme heat can reduce the quality and yield, and unpredictable precipitation can cause run-off of fertilizers. 

This article will dive into the specific climate risks facing tobacco yield and prices, and what sourcers can do to ensure their procurement strategies are resilient.  

Where Tobacco Is Grown And the Climate Risks Those Regions Face

Tobacco is grown in almost every part of the globe, with more than 100 countries growing varieties suited to their climates. However, production is centred around three main countries with ideal tobacco growing regions: China, Brazil, and India.

These regions have predictable rainy seasons and long dry spells, making them favorable for tobacco growth. But they face climate risks that could impact the yields and quality of tobacco in the following ways:

• China: As the world’s largest producer, China makes around 40% of the global supply. Increased heat and more unpredictable monsoon seasons in the future are likely to impact yields and global pricing. 
• India: In India, increased precipitation threatens yields in key growing regions as it can wash away fertilizer. The reapplication of fertilizer can cost millions of dollars. India’s tobacco crop is also threatened by extreme heat and drought conditions.

• Brazil: Brazil is the third-largest producer and largest exporter. So what happens to Brazil’s crop has a significant impact on global supply and prices. Around half of Brazil’s crop is focused in one state, Rio Grande Do Sul, which is predicted to have increasingly unpredictable rainy seasons. This season, for example, ClimateAi Risk Outlook data shows a medium risk for excessive rain. Looking at ClimateAi’s historical data, there have also been high risks of drought, which could return as an issue. 

Top Climate Risks for Tobacco Production

Climate-related trends and events can have a huge impact on localized tobacco yields and global prices. In 2023, global prices of all tobacco products increased by as much as 30% due to heavy rainfall in Brazil, drought in Zimbabwe, and other weather disruptions affecting major exporters. 

The main upcoming climate risks for tobacco production include:

• Precipitation: The biggest threat of precipitation is fertilizer run-off. Heavy rains, especially early in growing seasons, can reduce the effectiveness of fertilizers and require costly reaplications. 
• Dry Seasons: Tobacco plants require predictable dry seasons for the best quality and highest yield crops. Increasingly unpredictable weather patterns require growers to know exactly when prolonged dry seasons will be to get the most out of the planting season and avoid fertilizer run-off. 
• Drought and High Temperatures: Studies have shown that droughts and higher temperatures produce lower yields and lower-quality tobacco. 
• Extreme Weather Events: Flooding, from hurricanes, cyclones, or extreme precipitation, can impact yields and supply chains. 
• Dispersed Sources: With so many regions producing tobacco, it’s a complex undertaking to follow climate risks across all of these regions and effectively allocate resources and funding. 
• Growers diversifying: Some small-scale farmers are adapting their crops due to reduced yields, increased costs, and the health concerns related to handling tobacco. 

Many of these growing zones are in remote, hard-to-access areas, making it challenging for sourcing leaders to get timely, accurate field updates. Traditional monitoring methods also fail to accurately predict weather trends and events in these geographies, increasing the risk of weather disruptions.

What Tobacco Sourcing Leaders Are Doing to Build Resilience

Facing mounting climate risks, tobacco sourcing leaders are beginning to adapt how they plan and procure. Many are in a transition phase, moving from traditional practices to more accurate data-rich systems. Here’s how they’re currently navigating climate risks:

• Weather and Planning Decisions: Most teams use basic weekly forecasts and historical planting windows to guide decisions like fertilizer, planting, and harvesting timing. These methods are proving unreliable as weather patterns diverge from historical ones.
• Fertilizer and Resource Allocation: Fertilizer application still depends on experience and seasonal averages. When heavy rain leads to run-off, sourcers must make costly reapplications and will still likely get lower yields.
• Production and Risk Management: Procurement teams track multiple growing regions manually, using spreadsheets and anecdotal field updates. This becomes especially difficult when working with remote farms in countries like India or Brazil, where real-time field reports are rare. The ability to monitor weather and risk indicators remotely is increasingly seen as essential for responsive decision-making. Some companies are piloting risk monitoring tools, but most still rely on fragmented systems that don’t scale across global tobacco supply networks.
• Diversifying Sourcing Regions: As traditional growing regions face increased volatility, some leaders are exploring climate analogs, emerging areas with future climate conditions similar to current optimal zones. For example, parts of the northern U.S. and Europe are becoming more viable for tobacco cultivation as dry seasons shift northward.

While these strategies have been impactful in the past, in today’s changing climate environment, these strategies are not enough. Weather variability is increasing, dry seasons are arriving earlier or later, and traditional knowledge based on historical data is becoming less effective.

To build more resilience into their plans, companies need to bring together real-time data with long-range climate forecasts and region-specific yield insights. 

How ClimateAi Helps You Stay Ahead

ClimateAi’s suite of climate intelligence products offers tobacco sourcers the next iteration in their strategies to build resilience under an increasingly volatile climate. We can assist in four key ways:

• Targeted Climate Risk Forecasting: Access hyperlocal (1km²), crop-specific forecasts for droughts, floods, cyclones, and any other weather event or trends, helping growers and sourcers proactively manage extreme weather events.
• Remote Monitoring of Dispersed Regions: With high-resolution data and AI-driven updates, ClimateAi enables teams to monitor climate risk and weather trends in remote tobacco-growing zones without needing boots on the ground.
• Smarter Fertilizer and Resource Use: Loss of fertilizer to heavy rainfall is one of the most costly climate risks for tobacco companies. With long-range, accurate precipitation dashboards, businesses can improve fertilizer efficiency and resource allocation, potentially saving millions.
• Optimized Growing Regions: Compare current traditional growing regions with future growing zones with region-specific risk data to inform long-term procurement planning.
• Customizable Decision Support: Combine historical and forecast data into impact models that give alerts and provide dashboards for real-time risk mitigation and adaptation planning.

The tobacco industry is facing multiple climate risks in the coming years, with unpredictable dry seasons and precipitation patterns increasing fertilization costs.

The current forecasting tools procurement leaders use to make decisions lack spatial and weather accuracy, and the long-term lead times needed to be useful. With ClimateAi’s advanced weather modelling, companies will have the accurate weather data they need to inform their procurement strategies. 

As sourcing networks become more geographically spread and harder to monitor directly, digital climate intelligence platforms offer a critical edge, bringing visibility into even the most remote corners of your supply chain. Tobacco businesses that adapt their sourcing strategies first will gain a clear competitive advantage, reducing costs and increasing margins.

Tobacco 2025 FAQs