Tobacco earnings up 34%
LIVINGSTONE MARUFU
Zimbabwe’s tobacco earnings expanded by a third to US$428.87m in the past eight months from the same period last year on firming prices of the golden leaf, the Tobacco Industry and Marketing Board (TIMB) has said.
“As at August 16, 2022, about 92.3m kilogrammes (kg) were exported to more than 40 countries realising US$428.87m in the process compared to 82.18m kg exported in the same period last year, fetching US$319m,” CEO Meanwell Gudu told Business Times.
Average price, Gudu said, rose to US$4.65 per kg during the reviewed period from US$3.93 a kg realised in the same period last year.
He said export receipts are expected to peak after the end of the season where the merchants will be concentrating in shipping out mainly the previous year’s tobacco.
At the auction floors, Gudu said a total of 201.607m kg valued at US$616.27m were sold as of Wednesday last week with the average price at the auction at US$3.06 a kg, compared to US$2.79 a kg in 2021.
The country has surpassed 200m kg this week despite a very difficult farming season where most experts projected around 180m kg.
The Zimbabwe Tobacco Association CEO, Rodney Ambrose, said: “We are very happy with high production figures of 200m kg in a season where most crops performed badly due to erratic rainfall patterns.
“High production figures show the resilience of the part of the farmers who carry the burden of debt and climate change effects.”
Despite huge figures, Zimbabwe is believed to be earning at most 15% of the total tobacco earnings with the bulk of money going to the merchants who deduct their dues on contract sales.
“Though demand is high, sadly growers’ viability remains unaddressed. Growth is not forecasted and returns will continue to diminish,” Ambrose said.
Tobacco has been one of the leading foreign currency earners for the foreign currency-starved economy.
Farmers’ output, they claim, have not been creating sufficient returns to repay the loans in full and at least take home something significant.
Most farmers who have been over relying on borrowing said they can no longer carry the debts, which are spiraling out of control.
This implies that the pressures on tobacco farmers are significant.
The dire situation has threatened farmers’ viability, a situation that has left most tobacco farmers living on the margins.
