Zim’s tobacco is smoking hot

2012-05-12 11:21

Brazil shortage, Chinese buyers boost production

Tobacco production in Zimbabwe is on the rise as the high prices offered by Chinese buyers, the new high-end market for Zimbabwe’s golden leaf, continues to attract newly resettled black farmers to try their hand at tobacco farming, which in the past had been the preserve of the country’s 4 500 white commercial farmers.

Statistics gleaned from the Tobacco Industry and Marketing Board this week showed that tobacco sales volumes had increased, with 83.6 million kilograms of tobacco sold at the end of April in comparison with 66 million kilograms sold in the same period last year.

The price of tobacco has also been consistent at an average price of $3.78 (about R30) per kilogram, a high price which economic observers say is linked to the shortage of the golden leaf on the world market following floods that hit Brazil – one of the world’s leading tobacco producers, which has a yearly average production of 750 million kilograms.

In 2000, tobacco production in Zimbabwe peaked to 250 million kilograms but as a result of Zanu-PF led farm invasions, production slumped in 2008 to as little as 48 million kilograms.

The recovery of production has been spearheaded by the newly-resettled black farmers and began in 2010 at the turn of dollarisation, with 123 million kilograms delivered to the auction floors – which fetched $355 million.

Last year’s crop amounted to 131 million kilograms and netted $361 million.

A visit by City Press to the one of the main tobacco auction houses, Boka Auction Floors in Harare, showed a busy trek of newly resettled black farmers making their way to sell their crop.

Rudo Boka, the auction house’s chief executive, said: “Things are different from the past, when we used to have 20 white commercial farmers who came in to auction 50 bales each.

“Now thousands of black farmers come in with at least three bales each to sell and this explains the large human traffic that the floors are experiencing.”

Zimbabwe’s tobacco laws do not allow the auctioneers to buy tobacco from unregistered growers and this has lead to a boom in the number of registrations.

The tobacco board has in its records 57 000 growers allowed to sell their crop this season, a four-fold increase from the initial 15 000 growers that the board had registered at the start of the current season.

Andrew Matibiri, the tobacco board chief executive, praised the quality of the tobacco crop which he said was high and constantly improving.

“The favourable prices obtained at the moment are the result of a shortage of tobacco on the market and the fact that tobacco that originates from Zimbabwe is reputed for its good quality,” said Matibiri.

Boka said the improving yield was also linked to efforts by auction companies to teach the new tobacco growers through forums how to produce high quality crops that would sell for high prices.

China accounts for 40% of buyers of Zimbabwean tobacco, while west European markets make up 35% and the rest is distributed across the world.

Matibiri said: “This year we set between 150 and 170 million kilograms as a production estimate, not a target as is generally perceived. We use this estimate for planning purposes”.

The tobacco season ends in September and the current crop has so far raked in $315 million.

President Robert Mugabe’s Zanu-PF party is now basking in the glory of improving tobacco production to highlight the successes of its “Look East policy” and the land reform programme which in 2 000 received international condemnation for the violent way it was carried out by the war veterans group – a group of former liberation fighters loyal to Mugabe.

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