Zim eyes all-time record tobacco output

LIVINGSTONE MARUFU

Zimbabwe’s golden leaf is set for record output as deliveries are 12m kg shy of the 261m all-time high with more than a month before the selling season comes to an end.

As of Monday this week, tobacco deliveries to the floors increased 55% to 248.177m kg from 160.15m kg on the back of good summer cropping season and increased growers’ expertise.

Tobacco Industry and Marketing Board (TIMB) chairman Patrick Devenish told Business Times the 2025 target of 300m kg could be reached earlier if the current trend continues.

“We have set a target of 230m kg this year but we are surprised that we have gone past the target with a lot of days to go. We have now reviewed our target to 270m kg, which will be a record in the history of the country’s tobacco growing.

“We are receiving several million kilogrammes daily and the resounding success is attributed to good agriculture season and high tobacco growing expertise from small scale growers who have come of age in golden leaf farming as the amount and quality is amazing,” Devenish said.

Zimbabwe 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.

Previously a preserve for white commercial farmers, tobacco farming in Zimbabwe has, over the years, evolved to become the mainstay for smallholder and subsistence farmers, providing a source of livelihood for most of the country’s rural population.

Back then, 4,000 white farmers produced 85% of the crop.

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

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

“We have around 3283 growers and this proves that as an industry we must be doing something right and that is increasing the appetite to grow tobacco,” he said.

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 remained flat at US$3.02/kg.

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.

At the official opening of tobacco selling season, Vice President Constantino Chiwenga said Zimbabwe is only getting US$1bn in export receipts from its 200m kilogrammes of tobacco yet the same tobacco fetches US$15bn on the international market after the value chain.

“Value-add to over 30% from the current 2% of tobacco produced. We want more tobacco products produced in Zimbabwe, taking over the international market brands,” Chiwenga said.

He said the government was aware of the concerns raised about growers facing viability challenges as a result of the increased cost of production and the Reserve Bank of Zimbabwe has been instructed to consequently increase the retention threshold to 85% from 75%.

This means all tobacco growers who will sell their tobacco at auction or contract floors this season will get 85% of their money in United States dollars and 15% in local currency.

Chiwenga said increased US$ retention will go a long way in cushioning the tobacco grower, increasing the viability, and helping improve livelihoods.

Government has been dithering on the US$60m tobacco local funding kitty leaving farmers at the mercy of merchants.

It is estimated that Zimbabwe is losing 85% of the total value to merchants who deduct their dues on the auction floors, leaving the country with no value from the golden leaf.

The government has come up with the Tobacco Value Chain Transformation Plan, which focuses on localising tobacco funding, and the Cabinet has already approved a US$60m seed fund for the localisation of tobacco funding.

Some growers have outstanding debts to contracting companies as well as TIMB for the Tobacco Inputs Credit Scheme from the previous seasons.