Tobacco earnings tipped to hit US$1.6bn

LIVINGSTONE MARUFU

Government expects earnings from tobacco exports to hit US$1.6bn, up from US$991m earned last year, buoyed by record golden leaf output.

Next week on Monday is the final day of the 2023 auction tobacco-marketing season. Contract sales will, however, continue.

Permanent secretary in the Ministry of Lands, Agriculture, Fisheries, Water and Rural Development, John Basera (pictured) told Business Times the farmers have not only ramped up production but also improved on quality.

“In terms of the tobacco sub sector export receipts, we are projecting them to be around US$1.5bn to US$1.6bn from US$991m last year,” Basera said.

He added: “In terms of tobacco output, we are smashing the records as we have managed to surpass the 259m kg record of 2019.

“We are expecting to reach 295m kg by the closure of the tobacco-marketing season. It’s not only the production we have improved but yields per hectare have gone up to 2000 per hectare from 1500 a year ago.”

Official figures from Tobacco Industry and Marketing Board (TIMB) show that export revenue rose 13% to US$424.044m by end of June 2023 from US$375.43m   exported in the same period last year.

TIMB board chairman Patrick Devenish said the increase in output could be attributed to high tobacco growing expertise from small-scale growers and good rainfall patterns.

The country is the major flue-cured tobacco producer in Africa and occupies fifth position in the world after many communal farmers joined the lucrative farming sector following the land reform programme.

This year 148,527 farmers grew tobacco, up from 122,841 last year, according to TIMB figures.

TIMB said hectarage also increased to 117, 928 hectares from 110,155.

According to experts, droughts and climate change effects have forced buyers to bid firm prices on the country’s flue cured tobacco.

The golden leaf average price has gone down to US$3.03/kg from US$3.05/kg last year.

However, there are concerns that the country is losing a huge chunk of value to tobacco merchants who return the foreign earnings to offshore lenders.

Zimbabwe is not retaining value as 98% of the tobacco is exported in a semi-processed form, which means the country is exporting jobs and value.