Zim tobacco output rebounds, up 34pc

HARARE - Zimbabwean farmers have sold 52,5 million kg of the nation’s top export earner tobacco as at week four of the marketing season, 34 percent higher than the previous year’s output, official data showed.

This shows the sector recovering from the damage to commercial farming associated with land seizures.

Production and sales of tobacco rose from 39,1m kg in the prior season to 52,5 m kg as at week four of the marketing season following last year’s devastating drought that has left 4 million people facing hunger.

Statistics from industry regulator Tobacco Industry and Marketing Board (TIMB) showed that farmers had sold tobacco worth $107,7m, up 31 percent, at the country’s auctions and to official tobacco buyers since the selling season started in March.

But farmers have complained they are spending weeks at auction floors as banks are struggling to provide cash as a liquidity crunch intensifies amid surging demand for cash.

The government directive, instructing tobacco farmers to open bank accounts whilst doing away with spot payments at the auction floors, has been a disaster, since banks are not issuing out the stipulated     $1 000 for the initial sale. The country is facing an acute shortage of foreign currency which has ruined industrial operations and disrupted the import of raw materials and other critical products like drugs.

A total of 13 705 growers have sold through the auction system and 40 966 growers through the contract system. The average auction price at $2,70 compares favourably to $2,69 at contract floors.

Zimbabwe’s tobacco earns more than platinum and gold.

TIMB figures also showed that exports of tobacco earned $206,4m, 9 percent higher than the same period last year, with a large percentage of the sales going to China.

“The season is broadly expected to outperform with growth in China which is the largest consumer, remaining solid, demand will likely be sustained,” financial research firm, Equity Axis said.

South Africa is the second-largest buyer of Zimbabwe’s tobacco crop.

Market watchers said the marketing season is showing relatively firm numbers compared to the prior year and the previous seven selling seasons since 2009.

Central Bank governor John Mangudya has said the opening up of the tobacco auction floors on March 15 is expected to boost the country’s foreign exchange earnings and this is expected to go a long way in ameliorating the liquidity challenges in the market.

Post a comment

Readers are kindly requested to refrain from using abusive, vulgar, racist, tribalistic, sexist, discriminatory and hurtful language when posting their comments on the Daily News website.
Those who transgress this civilised etiquette will be barred from contributing to our online discussions.
- Editor

Your email address will not be shared.