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Tobacco sales rake in US$650,3 million

Tobacco farmers

ZIMBABWE has realised US$650,3 million from tobacco sales this year, up 10,3% compared to last year, statistics from the Tobacco Industry and Marketing Board (TIMB) show.

Last year, the southern African country earned US$589,6 million from the sale of 211,1 million kilogrammes of tobacco.

“TIMB wishes to advise all stakeholders that the final sale of tobacco for the 2022 tobacco marketing season was on 21 October 2022. Therefore, all contract and auction floors are closed. As of October 21, 2022, a total of 212 711 370 kilogrammes of tobacco had been sold at a value of US$650 308 534,”  TIMB said in an update on Tuesday.

“This is an increase when compared to 211 100 219 kilogrammes sold during the same period in 2021 at a value of US$589 573 827. The increase in tobacco sold as well as the value is evidence of our efforts as an industry to establish a US$5 billion industry by 2025.”

Average tobacco price for 2022 stood at US$3,06 per kg compared to the US$2,79 realised the previous selling season.

Apart from erratic rainfall which affected planting, farmers were affected by viability issues. For instance, the costs of production went up as demand for the United States dollar component in the operations grew.

The farmers’ problems were compounded by the government’s insistence that only 75% of the sales would be paid in the greenback. While the remaining 25% would be paid in the local currency, converted at the prevailing auction exchange rate on the day of sale.

The tobacco selling season is one of the few times that the government receives foreign currency but farmers complain that they lose out because their input and labour costs are paid for in foreign currency.

Tobacco is a capital-intensive cash crop.

Due to these factors among others, the number of new tobacco growers for the 2021/22 season declined by 50% compared to the previous year, TIMB noted.

As a result, tobacco hectarage decreased by 11% from 125 176ha to 110 770ha.

Tobacco production in the country remains heavily dependent on rainfall which makes it susceptible to climate change. False and flush ripening of the tobacco crop were experienced due to excessive rain, resulting in barn space being a major constraint.

In its 2021 annual report, TIMB reported that the Far East had been the top-most destination for Zimbabwean tobacco since 2012, absorbing 52% of total tobacco exports in 2016 and 40% in 2021. Of that market, China and Indonesia are the main buyers of Zimbabwean tobacco.

The board also revealed that the European Union and Africa were also significant destinations for Zimbabwean tobacco — absorbing a combined 38% of total tobacco exports in 2021.

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