LIVINGSTONE MARUFU
Zimbabwe’s tobacco export receipts have so far in the year soared 33% to US$310m from US$233.3m realised in the prior comparative period on the back of firm prices this year.
It also comes following subdued performance from Brazil and drought in most African countries, resulting in a rise in demand for the golden leaf.
The increase in the value of tobacco exported so far was revealed in the latest Tobacco Industry and Marketing Board (TIMB) bulletin published this week.
“As of May 13 (Friday) the country exported 63.8m kilogrammes at an average price of US$4.86 per kg (which comes to US$310m) against 56.4m kg exported at an average price of US$4.13/kg,” reads part of the TIMB bulletin.
In 2021, Zimbabwe grossed US$819.7m after exporting 183.6m kg of tobacco to five continents.
Zimbabwe exported tobacco worth US$485.2m to the Far East followed by the European Union (US$118.4m).
Tobacco exported to Africa and America amounted to US$102.3m and US$17.3m respectively.
The Zimbabwe Tobacco Association (ZTA) expects tobacco prices to firmer due to high demand.
“.….The prices will be firmer this season. A 15% – 20% increase in average US$ prices is expected this season.
“It is estimated that the average prices will be closer to US$3.00/kg up from US$2.01/kg in 2021.
“For Zimbabwe, all of the above dynamics point to much firmer prices this season. While there may be minimal upward movement in top leaf prices, especially China grades, there will be strong demand for the middle and bottom plant positions,” ZTA said.
Tobacco, which used to be the leading foreign currency earner, has gone down resulting in the golden leaf losing ground to gold, platinum and diaspora remittances.
About 80% of the earnings remain in the hands of merchants who provide inputs to farmers.
Consequently, many tobacco farmers are living on the margins.
The current funding system is not benefiting the tobacco farmers but middlemen such as tobacco merchants, leaving most of the farmers in dire straits.
It is estimated that over 95% of the tobacco farmers in Zimbabwe are under tobacco merchants’ contracts.
The tobacco merchants provide the farmers with inputs, since most farmers cannot raise their own capital required to undertake a tobacco farming business.
The prices of the inputs are said to be inflated, as the merchants take advantage of the desperate tobacco farmers.
Under such contract agreements, the tobacco merchants deduct their dues-the principal amount plus interests- at the auction floors, a situation which has seen some tobacco farmers taking home negative balances as some debts are carried forward.
This situation has affected production.
The number of registered tobacco farmers fell 17% to 119 979 this year from 140 771 last year while the new farmers registrations plunged 224% to 529 from 1717.
This shows that the appetite for growing tobacco in Zimbabwe has diminished.
TIMB expects Zimbabwe production to drop to 180m kg from above 200m kg last year.
