Zimbabwe: Tobacco Sales Rake in U.S.$309,8 Million

Source from:  Financial Gazette(Harare) 06/28/2011

A total of 114,1 million kilogrammes (kg) of flue cured tobacco valued at US$309,8 million has gone under the hammer at the country's three auction floors since the beginning of the selling season on February 16. Daily sales statistics from the Tobacco Industry and Marketing Board (TIMB) indicate that on day 84, 653 893kg of tobacco worth US$2 million was sold compared to 1 106 161kg worth US$3,2 million during the same period last year. The average price was US$3,00/kg compared to US$2,85/kg in 2010, representing a 5,35 percent increase. The bulk of the tobacco was sold under the contract system contributing 54 percent of the total tobacco sold to date. Small-scale tobacco farmers currently account for more than half of the country's output and TIMB urged farmers to focus on improving the quality of their produce as production increases. The weekly bulletin from TIMB also shows an increase in the number of registered tobacco growers to 65 439 growers, of which 17 768 are new, registered to start producing tobacco next season. This is an increase from 53 065 growers who had registered by August last year. According to the statistics, there has been a huge increase in tobacco small scale farming as 24 051 communal and 28 580 A1 farmers registered their interest in tobacco farming. Only 4,156 A2 farmers, 6 905 small-scale commercial and 1,747 large scale commercial farmers will be growing tobacco in the 2011/2012 season. However, there are fears that the influx of smallholder farmers venturing into tobacco would mean a decline in food production as most farmers are now producing cash crops. TIMB chief executive officer, Andrew Matibiri, said there was no need to panic as smallholder famers will continue to be the custodians of food production in the country. "Small scale farmers will continue to produce their food crops. What they are abandoning are the unprofitable cash crops and they are now switching to tobacco which has proved to be viable," Matibiri said. He added that the industry was poised for growth as the increase in the number of growers meant an increase in production and output. As a result, the future of the tobacco sector is in the hands of small scale producers. Mashonaland West has the highest number of new growers at 7,414 followed by Mashonaland Central with 4 727, Mashonaland East 2,957, Manicaland 2 367, Midlands 71, Masvingo 39 and Matabeleland with two growers. The number of farmers growing tobacco has been increasing every season since the dollarisation of the economy as the golden leaf has proved to be more profitable than other cash crops. Seasonal exports show that the bulk of the exports have been to China with 19,4 million kg of tobacco worth US$144,5 million having been exported. South Africa and the United Kingdom imported 5,7 million kg and 4,9 million kg respectively. Other export destinations include Mozambique, Angola, Sudan, Nethe-rlands, Ireland, Zambia, Australia, Canada, Russia and Belgium. The total exports of 53,2 million kg have earned the country over US$265,4 million. However, the 2011 tobacco selling season has been marred by a number of problems such as congestion due to farmers disregarding the booking system as well as late processing of payments and price manipulation. The congestion was also being fuelled by fears of the tobacco prices weakening as the season progressed. The situation was further exacerbated by a severe decline in tobacco prices in early May, vindicating the pessimistic predictions and fear of tobacco farmers that prices would go down as the season progressed. At least 170 million kg of flue-cured tobacco is expected to be delivered to the floors this season, up from 120 million kg last season. Enditem