LONDON- British American Tobacco , the world's No. 2 cigarette maker, posted improved sales volume for the first quarter, though foreign exchange rates were a big drag on revenue.

Gains in Asian countries such as Pakistan were more than offset by declines in European markets such as Russia and Poland.

"Emerging market volumes are increasing, however, the trading environment in Western Europe remains challenging," the company said.

Because people in many developed countries smoke less, British American and its rivals Philip Morris International and Imperial Tobacco rely on price increases to keep their revenue and profits growing. British American said revenue in the first quarter, excluding the impact of currency exchange rates, rose 2 percent, helped by price increases and gains in market share. Yet at current currency rates, revenue fell 12 percent.