Tobacco rakes in $43m

HARARE - Zimbabwe has earned $43,4 million from the sale of 12 425 246 kg of tobacco at an average $3,49 per kg, figures from the Tobacco Industry and Marketing Board (TIMB) reveal.

However, this is a marginal increase from $43,3 realised from the sale of 11 959 185 kg at an average $3,62 per kg same period last year.

Zimbabwe’s tobacco selling season opened 15 days ago with the golden leaf earning $800 000 on the first day of trade.

The crop is being sold at the three participating auction floors — Tobacco Sales Floor (TSF), Boka Tobacco Auction Floors (BTAF) and Premier Tobacco Floors (PTF).

Of the $43,4 million TSF sold 1 617 595 kg at an average price of $3,44 per kg, BTAF sold 1 492 286 kg at $3,42 per kg while PTF sold 1 225 217 kg at $3,31 per kg. The bulk of the sales came from contract sales that brought in $28 664 579 from 8 090 148kg.

A total of 155 259 bales have been sold so far compared to 136 771 bales sold last year, while the number of rejected bales has also significantly increased to 12,692 from 9,581 bales recorded in the prior period.

Despite the marginal rise in sales, Zimbabwe’s current tobacco production remains way below the peak levels of 236 million kg achieved in the year 2000, before the country’s farm seizures under the land reform programme.

In 2009, output slumped to 58,6 million kg, reflecting the effects of the political and subsequent economic crisis that peaked during 2008.

Zimbabwe’s tobacco output may rise by 23 percent to around 170 million kg this season, as more farmers grow the crop.

According to TIMB, the number of registered tobacco growers has almost doubled in the last year to 66 000 compared to 34 673 last season.

Zimbabwe is the world’s fourth-biggest exporter of flue-cured tobacco, after Brazil, India and the US, according to Universal Corporation — Virginia, the largest leaf merchant.

Tobacco is one of the country’s major agricultural exports, accounting for 10,7 percent of gross domestic product.

Major export destinations for Zimbabwean tobacco include South Africa, China, United Kingdom, Indonesia, the United Arab Emirates, Mauritius and Russia.

The flue-cured variety — the top quality tobacco — is used to provide flavour to brands like Marlboro and Benson and Hedges.

This comes after most food crop farmers abandoned their trade in favour of the golden leaf as a result of uneconomic pricing from the other crops as high cost of production weighs down heavily on profit margins.

The highest price that the leaf was fetching recorded by all trading floors on day 15 was $4,99 as compared to last year’s $4,96.

According to the Finance ministry, Zimbabwe earned $517 million from tobacco sales last year. - Business Writer

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