admin
Edgar Vhera
Agriculture Specialist Writer
AS tobacco continues to consolidate its position as the largest foreign currency contributor in the agriculture industry, its export earnings have surged 30 percent from US$745 million at this time last year to US$968 million this year.
Statistics from the Tobacco Industry and Marketing Board (TIMB) weekly report 44 dated November 03 show that there was a 30 percent increase in the value of exported tobacco from US$744 821 021 in 2022 compared to US$967 871 602 this year.
In volume terms there was a 23 percent increase from 153 675 001 kilogrammes in 2022 relative to 188 604 367 this year.
The average price slightly rose six percent from US$4, 85 per kilogramme to US$5,13.
The report revealed that the dominance of the Far East market in terms of mass and average prices is also continuing.
It accounted for 45 percent of the mass sold and the highest price of US$7,12 per kilogramme followed by Africa and European Union (EU) with 19 and 17 percent separately.
Zimbabwe Tobacco Association (ZTA) chief executive officer Mr Rodney Ambrose recently commented that the increase in tobacco export earnings was due to the rise in shipments to the Far East.
“There has been a significant increase in shipments to the Far East, as shipping constraints have eased. Also, a higher value crop has been exported to select destinations. Unfortunately, the same growth cannot be said of growers’ earnings. The future of the tobacco sector remains positive, provided we can address issues around growers’ viability and sustainability,” Mr Ambrose said.
Zimbabwe Tobacco Growers Association (ZTGA) chairman Mr George Seremwe said the increase in export earnings was a welcome development and growers must be applauded for that.
“We need to have inclusivity in the US$5 billion tobacco industry by 2025 so that smallholder farmers benefit from this. Over the past two seasons there has been a significant increase in cost of production with the grower on the receiving end while many were demoted to mere farm labourers based on their returns per hectare. This inclusivity should be on beneficiation, foreign currency retention and prices offered on the market,” the ZTGA chair said.
Mr Seremwe said everyone must be on the table to discuss the best way to sustainably grow the industry to fulfil the 2025 target, which was very likely.
“The grower is the foundation of the 300 million kilogramme target and must be attracted by the benefits of achieving such a feat. We urge Government to introduce incentives that will cut on cost of production as well as address the pricing model with input suppliers also willing to compromise on their profit margins in an endeavour to cut production cost,” he added.
Zimbabwe Farmers Union secretary general Mr Paul Zakariya said it was very commendable that close to US$1 billion had been exported to date.
“The vision for a US$5 billion tobacco industry is quite achievable. As we inch towards that vision, we need to significantly increase local funding for tobacco production. This will allow for local value addition and import substitution of finished products. That is where real value is,” he said.
Tobacco Farmers Union Trust president Mr Victor Mariranyika concurred saying generally this year’s production was a positive indicator for the achievement of a US$5 billion tobacco industry by 2025.
“All being constant, we expect the 2023/24 season to result in increased production, though the biggest challenge could be the predicted unfavourable weather pattern. We are also looking for a better pricing model, which is production cost driven and sustainable for the industry,” Mr Mariranyika said.
Zimbabwe exports partly or whole stemmed/stripped tobacco or not stemmed/stripped tobacco. It also exports tobacco refuse, cigars, cheroots and cigarillos containing tobacco, cigarettes and manufactured tobacco.
The Government and tobacco stakeholders in August 2021 came up with the Tobacco Value Chain Transformation Plan (TVCTP) with goal of achieving a US$5 billion industry by 2025 chiefly from increased production, value addition and beneficiation from the current two to 30 percent.
Online Reporter