Tobacco sales inch towards US$700 million

TOBACCO sales have reached US$683,8 million from 227,3 million kilogrammes delivered at the auction floors since the start of this year’s marketing season in March, official figures.

In the corresponding period last year, US$445 million was realised from 148,3 million kg.

According to statistics released by the Tobacco Industry and Marketing Board (TIMB), as of Friday last week, 16,8 million kg valued at US$48 million had been sold through the auction system while 210,5 million kg were sold under the contract arrangement earning US$635,7 million.

The average price was US$3,01 per kg.

This year’s selling season opened with the Government calling for transparency among actors in the industry to eliminate farmer deprivation by middlemen while enhancing fairness and sustainability in contract and auction sales.

Production is this year expected to increase by 8,5 percent year-on-year and foreign currency retention hike is part of the Government’s efforts to ramp up output to a national target of 300 million kg by 2025 which is a key anchor of the broader national strategy of an upper middle-income economy by 2030.

At the moment, tobacco farmers retain 85 percent in foreign currency while the remainder is paid in local currency.

Last year, the farmers were paid 75 percent in forex while the balance was in Zimbabwe dollars.

Through the Tobacco Value Chain Transformation Plan, Zimbabwe aims to build the industry into a US$5 billion economy by 2025.

The country anticipates to produce 230 million kg of the golden leaf this marketing season, up from 212 million kg realised in 2022.

Tobacco is Zimbabwe’s agricultural major foreign currency earner after raking US$800 million in 2021. The output has grown from 48 million kg in 2008 to over 200 million presently, and the bulk of the crop is produced by small-scale farmers.

At present, only 18 percent of the crop is grown under irrigation, and the intention is to expand this to at least 40 percent.-ebusinessweekly