HARARE, Apr. 19 (NewsDay Live) — Major tobacco buyers have dismissed claims of price manipulation this season, blaming low prices on global oversupply and weak demand.
“There is no manipulation in pricing. It’s oversupply and declining demand,” said a senior executive at an international merchant, declining to be named.
He said the criticism reflected a misunderstanding of market dynamics. “Lack of in-depth understanding of the industry has seen some officials become emotional over low prices. It’s what they think, and we can’t argue with them,” he added.
Another senior buyer said some farmers had unrealistic expectations given crop quality. “If you take a cow’s ear to an abattoir, how much do you expect?” he said, arguing poor grades were weighing on returns.
He accused government of “firefighting” after encouraging a larger crop despite market warnings. “There is a global oversupply, and Zimbabwe’s output can easily be overshadowed by other producers,” he said.
The denials come amid state media reports alleging surrogate companies are contributing to depressed prices.
Local firms, commonly referred to as surrogates, defended their role, saying they employ more than 2,000 seasonal workers and finance small-scale farmers lacking collateral and often overlooked by large merchants.
“Surrogates take that risk. They bring marginalised communities into the economy. These are wholly indigenous firms whose profits remain in Zimbabwe,” an insider said.
- Minister bemoans shortage of schools
- BCC joins Green Cities initiative
- Mlalazi chronicles his rags-to-riches story
- Mlalazi returns to roots with a free concert
Keep Reading
“It’s unfortunate that some locals are fighting each other while supporting what we view as economic exclusion,” he added.
He argued surrogates enhance competition and support prices. “Without them, large merchants could easily collude to suppress prices,” he said.
China accounts for roughly a third of global tobacco output, with India and Brazil also key producers. Merchants say the surplus has dampened buyer appetite despite Zimbabwe’s larger crop.
Farmers have protested low prices since the marketing season opened, with some withdrawing bales under TIMB rules allowing growers to reject offered prices.
