Zimbabwe tobacco sales gross US$86.3mln, twofold higher than last year

By Almot Maqolo

The Tobacco Industry and Marketing Board (TIMB) says about 38.19 million kilograms of tobacco worth US$86.34 million have been sold so far since the start of the selling season last month.

The 2020 marketing season, which usually starts in March, was delayed due to the Covid-19 pandemic. Among other Covid-19 preventive measures, farmers are allowed to deliver tobacco for sale only once per week while those selling less than 100 bales will not be allowed to attend sales and shall nominate a TIMB registered grower representative to make decisions on their behalf.

No vending, banking facilities and operation of flea markets outside auction floors are allowed. Each selling point shall have a designated isolation facility while only essential persons will be allowed to enter premises and will be screened.

It has since advised auction floors to consolidate tobacco deliveries to minimize the number of farmers coming to Harare and encouraged contract farmers outside Harare to make use of selling points provided by their contractors in the provinces. Despite all that, golden leaf deliveries have continued with its upward trajectory amid concerns over side marketing. Tobacco farmers retain half of their proceeds in foreign currency and get the remainder in local currency at a bank rate of 1:25, at a time the parallel market rate is at 1:65.

Tobacco is the southern African nation’s top export earner after the yellow metal. Previously a preserve for commercial farmers, tobacco is fast becoming an attractive source of livelihood for many of Zimbabwe’s small scale and communal farmers.

This year tobacco was grown under two extremes of weather characterised by delayed rains and prolonged drought. Latest data from the industry regulator shows that the volume of tobacco sold so far represents a 137.56 percent increase from 16.28 million kgs worth US$28.64 million traded in the same period last year.

Of the total volume of tobacco sold so far this year, at least 37.06 million kgs went through the contract system while the remainder went under the hammer. The average price at both auction and contract floors stood at US$2.26 per kg which is 28.51 percent higher than in the 2019 marketing season.

The crop has so far fetched a highest price of US$6.60 per kg while the lowest has been 0.10 cents per kg. Rejected bales increased by 6.31 percent from 16 921 in 2019 to 17 988 this year. Last year, it generated $747 million in exports mainly to China and Europe, according to central bank data.

Traditionally, the opening of tobacco auction floors leads to improved foreign exchange inflows in the country buyers scramble to purchase the crop at the same time bringing in the much needed foreign currency.

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