Zimbabwe Tobacco Sales Fall

Source from:  Reuters Mmegi (bw) 09/01/2004

HARARE: Zimbabwe's tobacco auctions close today on the backdrop of a 35 percent fall in foreign currency earnings and crop sales but industry officials expect farmers to lift output in the coming season. [img border=0 hspace="4" vspace="4" align="left" src=http://www.tobaccochina.com/english/picture/242210.jpg] Analysts blame the drop in output, from a high of 237 million kg in 2000, to President Robert Mugabe's seizure of white-owned farms for redistribution to landless blacks. Yesterday, industry officials said the 2003/04 flue-cured Virginia tobacco crop would be about 70 million kg when sales floors close, down from the previous season's 82 million kg. Burley tobacco output has dropped from 1.1 million kg sold last year to only 494,000 kg. Statistics from the Tobacco Industry and Marketing Board (TIMB) showed that total earnings had declined to $130.2 million from just over $201 million last year on the back of low leaf prices and lower output. Tobacco is one of Zimbabwe's biggest single foreign currency earners, accounting for about a third of the country's earnings. But the earnings are expected to do little to alleviate a crunch, which has seen Zimbabwe fail to service debts with international lenders who have halted balance of payment support. TIMB chairman Njodzi Machirori said the industry had targeted output of 230 million kg next year, a figure some farmers said would not be achieved. Machirori said financial support to farmers was inadequate but expected this to be resolved soon by the country's central bank, which is expected to help with more funding for inputs. "That is what we have set to achieve but that figure can be revisited depending upon the circumstances," Machirori said. The irrigated tobacco crop, which accounts for 40 percent of output, will be planted from this Wednesday while the dry land crop is expected in the ground in October. The Zimbabwe Tobacco Association (ZTA), made up of 500 large-scale farmers from 1738 in 2000 and thousands of small-scale farmers, said output would at most rise to 75 million kg or remain static next year. Rodney Ambrose, ZTA chief executive said the industry was working towards stabilisation before tobacco output could rise again, adding that farmers were behind with land preparations. "We have a potential to produce a big crop but we need financing to rehabilitate some infrastructure which has been left idle over the years," Ambrose told Reuters. Industry officials say agricultural and irrigation equipment on some commercial farms were either vandalised or stolen during sometimes violent farm seizures, and would need to be repaired or replaced to help boost crop production. Zimbabwe is battling a deep economic crisis since independence in 1980, dramatised by critical foreign exchange shortages and high levels of inflation. The Central Reserve Bank of Zimbabwe introduced foreign exchange auctions in January in a bid to snuff out a black market where the Zimbabwe dollar traded as much as 7,000 per US dollar but has since stabilised to around 5,600. The central bank says foreign exchange inflows into the official market have increased by 385 percent to $778.6 million in the first half of 2004. Enditem