First quarter tobacco earnings record momentous growth

Edgar Vhera Agriculture Specialist Writer

TOBACCO export earnings recorded a phenomenal 138 percent growth from US$183 million in the first quarter of 2023 to US$ 436 million in the comparable period this year, as cigarette exporters were urged to explore high paying markets.

This comes as the country adopted the Tobacco Value Chain Transformation Plan (TVCTP) in August 2021, which seeks to enhance the attainment of a US$5 billion industry by 2025 through increased tobacco value addition and beneficiation from the current two to 30 percent.

Statistics availed by the Zimbabwe National Statistics Agency (ZimStats) show that for the period January to March 2023 earnings from tobacco product exports were US$183 267 789 compared to US$436 482 209 this year.

The country’s tobacco product exports are composed of partly or whole stemmed/stripped tobacco, tobacco not stemmed/stripped, refuse, smoking tobacco, cigars, cheroots and cigarillos containing tobacco as well as cigarettes containing tobacco.

	Period
	1st quarter 2023	1st quarter 2024
Category	US Dollar Value	US Dollar Value	% change
Tobacco, not stemmed/stripped	902	41,518	4,505.35
Tobacco, partly or wholly stemmed/stripped	157,536,849	410,310,045	160.45
Tobacco refuse	3,419,373	3,588,136	4.94
Cigars, cheroots and cigarillos containing tobacco	31	–	– 100.00
Cigarettes containing tobacco	22,310,634	22,055,195	– 1.14
Smoking tobacco	–	487,314	#DIV/0!
Total	183,267,789	436,482,209	138.17

Source: ZimStats

An analysis of the average 2024 prices received for the different product classes shows that cigarettes containing tobacco had the highest price of US$7, 44 per kilogramme followed by tobacco, which is partly or wholly stemmed/stripped at US$7, 39.

Smoking tobacco came third at US$6, 45 per kilogramme with tobacco not stemmed/stripped on fourth at US$0, 70 while refuse came last on US$0, 31.

Zimbabwe Tobacco Growers Association (ZTGA) chairman Mr George Seremwe yesterday attributed the increase to hard work by farmers, other tobacco stakeholders and the good rains received in the 2022/23 season that impacted positively on quality.

“Nevertheless, we are encouraging cigarette manufactures to look for markets that guarantee high prices to add impetus to the push to achieve the US$5 billion tobacco industry by 2025,” he said.

Tobacco Farmers Union Trust vice president Mr Edward Dune said due to the El Nino-induced drought, the 2025 US$5 billion target might not be achievable though cigarette prices should rise to show the impact of value addition.

The Tobacco Industry and Marketing Board (TIMB) weekly report 17 ending April 26, shows that the Far East consumed 63 percent of all our tobacco shipments (45 996 399 kg) valued at US$342 982 150. This was the highest paying market with an average price of US$7, 46 per kg.

The African market came second accounting for 12 percent of the volumes but offered the lowest price of US$2, 74 per kg.

The Middle East, European Union (EU), Americas and Europe consumed the remaining tobacco shipments in that descending order.

On the other hand, in terms of average prices, Europe, Americas, EU, Middle East and Africa had second highest prices in decreasing order.

Meanwhile, the country’s exports of tobacco products have been on an upward trend generating US$ 795 million in 2020, followed by US$837 million in 2021, US$998 million in 2022 to last year’s US$1, 3 billion.

Tobacco exports 2010-2023: ZimStats

As a result of the El Nino-inspired drought, the 2024 marketing season is expected to have reduced tobacco output with the second-round crop, livestock and fisheries assessment report estimating it to be around 236 819 tonnes down from 296 135 tonnes in 2023.