Flue-cured tobacco rakes in $500m

Samuel Kadungure Senior Farming Reporter
FLUE-CURED tobacco which has been sold at the country’s various auction floors sales since the beginning of the 2015 selling season in March, has reached the $500 million mark.

An estimated $45 million was sold under contract.

Stats from the Tobacco Industry and Marketing Board (TIMB) on Tuesday indicated that tobacco sales were down by 16 percent for day 75, compared to the same period last year.

By this time last year $592 million worth of gold leaf had been sold.

Tobacco prices have, however, remained poor at $2,96 per kg.

The prices are seven percent lower compared to $3,18 which was prevalent the same period in 2014.

The majority of Zimbabwe farmers have converted their maize field to tobacco due to its perceived quick returns on investments when compared to other crops, but fears abound that if the new low pricing regime continues, many are likely to quit the labour intensive crop.

Small-scale tobacco farmers complained that they are faced with the “good crop and poor price” dilemma that threatens to force them out of the farming business if no urgent corrective measures were taken to fine-tune price distortions.

The farmers argue that farming was a business and their hopes of getting a return of their investment have been extinguished after racking up huge losses for the past four months due to lower prices being offered at the auction floors.

The 2014/ 15 season registered at least 106 000 growers, of which, 26 816 are new growers.

In 1013/ 14 season TIMB put the growers statistics at 88 444.

Of these more than 1 000 are new growers from Masvingo, Midlands and Matabeleland North provinces, areas which were previously non-traditional tobacco growing areas.

Total flue-cured tobacco output in 2014 amounted to 216 million kg, compared to 165,85 million kg realised in 2013.

In its 2015 national budget, Government projected a hectarage of 90 000 for tobacco, whose output is projected at 222 million kg.

Andrew Matibiri, Timb chief executive recently indicated that tobacco deliveries were continuing at contract floors while a decline had been registered at the auction floors.

“Most farmers who sell at the auction floors have sold their crop, but Manicaland and Mashonaland East still have a significant crop,” he said.

Tobacco Association of Zimbabwe president, Mr David Guy Mutasa, said some farmers in Manicaland had not finished harvesting the late planted crop.

Mr Mutasa, however, maintained those farmers who have not cleared their fields of stalks must have applied for an extension otherwise they would be ticketed.

“I know of several farmers who are still reaping, while others have not started grading their crop for sale. You have to appreciate that the rains came late and farmers planted late,” said Mr Mutasa.

The auction floors used to record an average deliveries of 8 000 per day but figures have dwindled to around 3 000 bales.

He said the season was going on well and prices were close to where they were last season.

This comes as a number of farmers have been complaining of the low prices offered especially at the auction floors while merchants have been complaining of low quality crop.

Mr Matibiri, however, noted that some farmers lacked knowledge on production and presentation of the crop and were not up to date with market requirements.

“Timb has partnered with Leaf Trade Limited to educate farmers on the market requirements. Merchants no longer want small leaves but now require big and darker leaves. We are assisting farmers to produce a leaf that is required by the buyers so they can get viable prices,” he said.

At least 220 million kg is expected to be sold this year up from 216 million kg earning the country nearly $600 million.

However, agriculture experts believe that the heavy rains the country received in January and February greatly compromised both the quality and quantity of tobacco.

They estimate that a yield of one-and-a-half to two tonnes per hectare has to be reviewed downwards.

At the peak of output, the southern African country produced 236 million kg of tobacco, which is commonly referred to as the golden leaf locally and is grown mainly by small-scale farmers.

Prior to the land reform programme, the country grew most of its tobacco on large commercial farms.

Zimbabwe traditionally competes with countries including Brazil and the United States as a key source of the top-quality variety of the crop known as flue-cured tobacco.