‘Tobacco farmers’ earnings keep rising’

Obert Chifamba

TOBACCO earnings have kept rising even after the 2022 marketing season was officially declared over!

The Tobacco Industry and Marketing Board (TIMB) allowed farmers to continue delivering to the contract floors while the auction floors would proceed by way of mop up sales on set days.

By Day 117 of this year’s marketing season, farmers had pocketed US$635 million from the sale of 208 million kilogrammes of the golden leaf marking a 1, 58 percent change from the corresponding period last season when 211 million kilogrammes worth US$590m had been sold.

Prices for this year’s tobacco have been heavily influenced by law of supply and demand in which there has been a high demand versus low supplies following a drop in the crop’s hectarage in global strongholds of the crop such as Brazil.

Renowned producer, Brazil, is likely to be 80 million kilogrammes short of their usual production level because of drought, which created less competition for local farmers.

India on the one hand has also fixed its 2021/22 production of Flue Cured Virginia at 270 million kilogrammes, against 236 million kilogrammes the previous year while top quality tobacco grades for premium brands are likely to remain unchanged (US$3,5 — $US5, 40/kg) in prices compared to last season.

Auction floors have sold 13 million kilogrammes with a value of US$40 million while its contract floors counterpart have accounted for 195 million kilogramme worth US$595 million.

The highest price for this season was US$6, 80 and was recorded at the auction floors while the lowest at both floors was US$0, 10.

This season are receiving 75 percent of their sale proceeds in foreign currency with the remaining 25 percent in local currency, converted at the prevailing auction exchange rate on the day of sale.

The 75 percent is being paid directly into the growers’ foreign currency accounts and this is treated as free funds while 25 percent local currency is deposited into the growers’ local bank accounts or e-wallets.

This season 122 995 growers registered with TIMB to grow the golden leaf compared to 145 000 during the same period last year.

Of the registered growers 607 were registering for the first time compared to 1 600 last season.

The farmers planted 110 770ha of tobacco marking a decline of 11 percent from 125 176ha planted at the same period last year.