Zimbabwe’s tobacco crop is this season expected to top 200 million kg, a harvest last realised in 1999 before the country’s land reform programme.
Earnings from the sale of the crop are also expected to increase by 16 percent.
Before 2000, tobacco was grown by less than 4000 white tobacco farmers, a drop compared to the more than 66 000 black tobacco farmers who have ventured into the lucrative crop.
Tobacco is Zimbabwe’s top foreign currency earner, after mining, and the 5.8 percent increase in harvest – compared to last year’s earning – will give the country a lifeline against the biting foreign currency shortages.
Some 186.3 million kgs of the golden leaf were sold last year. Contract sales of the crop have also commenced.
Most of the tobacco is sold to China, South Africa and Belgium.
The Tobacco Industry Marketing Board (TIMB), which regulates operations in the industry, has licensed three auction floors for the 2018 marketing season; Tobacco Sales Floor (TSF), Boka Tobacco Floors (BTF) and Premier Tobacco Auction Floor (PTAF). The Board also licensed 29 and 23 A class and contract buyers, respectively.
Reserve Bank of Zimbabwe (RBZ) statistics show that last year, tobacco generated $1 202 247 760 in export proceeds. China is expected to remain the top source market for tobacco exports.
Officiating at the launch of the 2018 tobacco marketing season in Harare recently, acting President Constantino Chiwenga assured farmers that government would support tobacco farming in order to boost economic development due to its foreign currency generation.
“I am elated to report that government has extended the tobacco contract model to the same category of the maize production programme, commonly known as command agriculture, which has recently been extended to cover wheat, soya beans, livestock, fisheries and wildlife production. So tobacco as from this coming season will also be on command agriculture,” he said.
The inclusion of tobacco under command agriculture is part of government’s efforts to increase the production of the golden leaf, which this marketing season is expected to see between 180 million and 200 million kilogrammes of the crop sold.
Ciwenga said tobacco had earned a strategic position in the Zimbabwean economy because of its contribution to the Gross Domestic Product and foreign currency earnings.
He said more than three million people depended on the industry for their livelihoods, hence Government would continue to support the sector.
At the opening of auctioning of the golden leaf, the bidding price for the first bale started at $6 per kg before going down to reach $4,90.
Chiwenga said value addition was also needed for tobacco, which could increase earnings and provide an import substitution.
“Currently, 98 percent of all tobacco production is exported. Tobacco processing is partially being done by merchant companies, who remove stems and tips from the leaf before it is shipped abroad. This adds to a mere 30 percent to 50 percent to a crop’s final export value. Value-addition would not only create the much-needed jobs in the downstream processing industries, but also result in increased earnings from the processed product,” he said.
“The country would also significantly benefit from attained by-products such as pesticides and hair products. This will inevitably help reducing the unsustainable import bill through import substitution.”
He commended the tobacco contract companies for financing 82 percent of the crop in 2017/18 season.
In his monetary policy statement last month, RBZ governor John Mangudya said the tobacco input finance facility would be increased to $70 million this year up from the $28 million disbursed in 2017.
Mangudya announced plans to float a Diaspora tobacco financing bond to raise funding for tobacco production.
Tobacco Industry and Marketing Board chairperson Monica Chinamasa said the unfavourable weather conditions might affect the tobacco brought to the auction floors.
“It might be because we had hailstorm damage as well in the beginning and then drought, excessive rains, so it depends at what stage the tobacco was at that time. It could impact, but we are praying that the impact is not too much,” she said.
Chinamasa said most of the tobacco to be auctioned would most likely be the irrigated crop.