Zim tobacco exports reach $518m

HARARE - Zimbabwe's tobacco export earnings rose by nearly 10 percent to $518 million in the seven months to October on higher prices and demand from China.

Tobacco is the country’s single largest export commodity, ahead of platinum and gold.

Statistics released by the Tobacco Industry and Marketing Board (TIMB) yesterday showed that cigarette makers in China, the world’s biggest market and grower of tobacco,  bought 33,3 million kilogrammes (kg) of the golden leaf valued at $265 million.

This was after the country had exported 101 million to various countries around the world in the period under review compared to 94 million kg sold in the same period last year earning $473 million.

Other major buyers of Zimbabwe’s flue-cured tobacco, which is used as flavouring in cigarettes, are Belgium, South Africa and Indonesia.

Chinese buyers paid an average of $7,95 per kg, more than double what the other major buyers offered.

China has become the largest investor in Zimbabwe, which has been shunned by the West over its human rights record and is struggling to emerge from a deep 1999-2008 recession that forced the government to ditch its own currency in 2009.

The latest data also comes at a time when the United States of America and Mauritius have dumped importing Zimbabwean tobacco due to an increase in human rights abuse.

The two countries, which were among Zimbabwe’s top ten tobacco export destinations and imported a combined total of $11,7 million of the golden leaf in 2015, were conspicuous by their absence on this year’s list of top 40 importing countries.

Economic experts say the withdrawal of deep-pocketed countries such as the United States and Mauritius from buying Zimbabwean products is a heavy blow to the country’s ailing economy, which exports 90 percent of its tobacco and is in dire need of fresh capital to offset a biting liquidity and cash-crisis.

“America and Mauritius used to buy our tobacco at good rates. For instance, in 2015 they imported tobacco at an average of $4,00 per kg, which is far ahead of the $2,79 that South Africa was offering and if they (US and Mauritius) had continued buying this year, prices would have definitely improved,” said an official knowledgeable about developments  at TIMB.

Tobacco farmers early this year sought audience with the tobacco industry regulator over grossly low prices which were obtaining at the auction floors despite a huge improvement on the quality of the crop.

Figures obtained by the businessdaily show that tobacco prices averaged between $2,50 and $2,60 per kg this year compared to an average of $3,60 per kg in 2015.