Tobacco sector upbeat for a promising season
Zimbabwe’s tobacco industry is poised for another potentially positive season, following a historic crop yield in 2023, the Tobacco Industry and Marketing Board (TIMB) said.
In an interview, acting chief executive Mr Emmanuel Matsvaire said preliminary indications suggest a promising season ahead, although the full crop assessment is still ongoing.
The initial dry spell raised concerns about a potential decline in yield, but most parts of the country have been receiving rainfall since mid-December.
The recent rains have significantly reduced those concerns and boosted hopes for a strong harvest.
“We are looking at two fundamentals; the hectarage and the potential yield and with what is on the ground we are likely to have good season,” said Mr Matsvaire.
“Information that we have received so far shows that 136 000 ha have been planted but we still have some districts that have not submitted the figures,” he added.
A staggering 300 million kilogrammes of tobacco were produced, exceeding the initial target of 230 million kg and the previous record output of 253 million kg in 2018.
Under the Tobacco Value Chain Transformation Plan — approved by the Cabinet in 2021 — the Government has been targeting to increase the output to 300 million kg by 2025.
The plan also seeks to raise localisation of tobacco funding to 70 percent, increase the level of value addition and boost cigarette production to 30 percent from 2 percent.
Last season, the number of tobacco farmers also saw a significant rise, reaching 148 527 compared to 123 000 in 2022.
This increase is attributed to factors like improved support for small-scale farmers, higher tobacco prices and favourable weather conditions.
Tobacco is the country’s largest foreign currency earner after gold. As at December 29, 2023, tobacco export amount to about US$1,24 billion from US$983 million in 2022.
Tobacco farming holds a unique place in Zimbabwe’s story, not just as a major economic driver, but as a powerful symbol of empowerment.
Before the land reform programme in the early 2000’s, vast tobacco estates were owned by a handful of large-scale white commercial farmers.
Indigenous people faced significant barriers to entry, with limited access to land, financing, and technical expertise.
The land reform programme dramatically reshaped the landscape, allocating formerly white-owned farms to a growing number of black Zimbabwean farmers.
This historic shift opened doors for thousands who previously lacked the opportunity to participate in the lucrative crop.
Currently, hundreds of thousands of black Zimbabwean families are actively involved in tobacco farming, cultivating golden leaves that have become a vital source of income and livelihood.
This economic empowerment extends beyond individual farmers, contributing significantly to national export earnings and fostering rural development.
However, the successful empowerment of the sector at the primary level has not translated to gains further down the value chain, where superior returns are being made by leaf merchants and cigarette manufacturers.
By way of an illustration, the top price for tobacco on the floors average US$5 per kg. The same kg retailing in developed country markets sells for around US$500 after blending with lower-cost tobacco from other markets.
About 98 percent of tobacco produced in Zimbabwe is exported in green form by big tobacco merchants.
With one or two exceptions, indigenous tobacco merchants have failed to penetrate export markets due to formidable entry barriers in the form of access to low-cost funding, long working capital cycles, access to markets in the exclusive “old boys club” of global tobacco as well as lack of factory processing capacity.
As a result, indigenous merchants have been condemned to trading as speculators on the auction floors, surrogate buying on behalf of the big merchants as well as management of contract growing schemes on behalf of the large merchants.
-herald
