Zimbabwe Tobacco Industry Hit by Low Prices

Source from:  South African Broadcasting Corporation‎  03/21/2014

Tobacco farming has been said to be the salvation of Zimbabwe's struggling economy but just three weeks into the selling season, low prices have hit the market.

This season has seen more than 20 000 new tobacco growers - a factor many believe is partly to blame for the chronic staple food shortages.

The question now is - will the switch pay off?

Anxious first time tobacco growers are at the auction floor, wanting to know if the promise rings true.

Established growers have been able to acquire luxury items with their profit.

Primrose Rukara is one of the success stories: "I bought a car, Ipsum, the latest. Then this year, I can buy a two tonne truck."

President Robert Mugabe's July election win has rapidly worsened the economic situation. Over 20 000 people switched from food crops to tobacco farming when they heard there was money to be made.

New tobacco farmer Whyson Godrick took his profits from a struggling transport business, putting them into tobacco and as with many first timers, his reaction at the auction floors today is one of dismay. 

"We were promised heaven on earth but I am not seeing anything."

The increased production from new farmers has flooded the lower end of the market and prices have dipped.

Prices are 15 to 30 % lower than the average $3, 33 per kg of last season. Some bales are fetching as little as 90 cents a kg, others nothing at all. 

Godrick's four bales have fetched between $1, 60 and $3, 50 per kg.

"It means you need to fork out from your own pocket again to go back to the field. You need second thoughts."

Chief Executive Officer of Boka Tobacco Auction Floors, Rudo Boka, addresses protests over low prices.

"This is pure business", she explains to farmers around her. You can't expect a buyer from China to pay top dollar for a product of this quality or to smoke it just because they feel sorry for you and your sacrifice."

She believes first time growers skimping on inputs, poor curing methods, and cheap illegal chemicals accounted for the price dip.

"This has to be a wake-up call to anyone who calls themselves a tobacco grower. This is about inputs, it's about science. This is very, very serious. If we are not taking advice of applying recommended fertilisers and approved chemicals; that's the one element, the other is the skill set."

Zimbabwe has forecast it will produce 190 million kg's this year, up 30 million from last year.

Industry experts say the poor performance so early in the season is not likely to impact the target.

But for farmers like Whyson Godrick, the golden leaf has lost its shine and left him with dashed dreams. Enditem