Tobacco export receipts surge 4%
LIVINGSTONE MARUFU
Zimbabwe’s tobacco export receipts have surged 4% to US$307m in the year to date from US$2295.5m realised in the prior comparative period on the back of firm prices.
The increase in earnings comes following subdued performance from most African countries due to droughts, resulting in a rise in demand for the golden leaf.
“As of 13 April 2023, Zimbabwe had exported 54, 927,272 kilogrammes of tobacco valued at US $307, 090,421. During the same period in 2022 tobacco exports stood at 57, 586, 367 kilograms valued at $ US 295, 518, 092,” the Tobacco Industry and Marketing Board (TIMB) said in a latest sector bulletin.
In 2021, Zimbabwe grossed close to US$1bn after exporting 183.6m kg of tobacco to five continents.
Zimbabwe exported tobacco worth over US$480m to Asian countries followed by the European Union (US$118.4m).
Tobacco exported to Africa and America amounted to US$102.3m and US$17.3m respectively.
Farmers’ organisations expect tobacco prices to be firmer due to high demand.
“…The prices are firmer this season. A 15% – 20% increase in average US$ price is expected this season.
“It is estimated that the average prices will be closer to US$3.02/kg up from US$2.97/kg in 2022.
“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,” a representative of all farmers’ unions in Zimbabwe, Bright Bvukumbwe 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 on the list of top foreign currency earners.
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 96% 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 merchants are accused of inflating the prices of inputs thereby ripping off 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 boasts of 148,527 growers doing 117,928 hectares of tobacco during the 2022/23 tobacco production season as compared to 110,155 hectares of tobacco by 122,841 growers.
TIMB registered 3,283 new growers and this shows the farmers remain hopeful despite the ballooning debt.
The board projects Zimbabwe’s production to reach 230m kg from above 212m kg achieved last year.
