Foreigners flock to tobacco floors

Business Reporter
Poor grading and presentation, and glitches in e-auctioning have led to a marginal decline in the early stages of this year’s tobacco marketing season compared to the prior period, but foreigners are still flocking to buy Zimbabwe’s golden leaf.

Statistics from the Tobacco Industry Marketing Board show that China has so far bought 13,7 million kg worth US$114 million, followed by Russia (2,2 million kg for US$6,4 million), Indonesia (2,3 million kg  for US$6,4 million), Belgium (4,2 million kg for US$6,3 million), South Africa (2,8 million kg for US$5,3 million), and the United Arab Emirates (1,6 million kg for US$4,3 million).

Other major foreign buyers include Bulgaria, France, Germany, The Netherlands, The Sudan, Tanzania and Vietnam.

The TIMB said, “As of March 23 2017, 38,9 million kg were exported to more than 42 countries so far, generating US$192,2 million into the local economy. The golden leaf is presently being exported to these countries at an average price of US$4,95 a kg compared to US$6,28 (in) the same period last year.

“Poor grading and bale presentation increase in rejection of wet bales and inconsistency of e-auction system are some of the challenges that this year’s tobacco is facing.”

While the TIMB has forecast output to top 205 million kg this year, the Reserve Bank of Zimbabwe suggest production will soar to 215 million kg.

Last year, farmers produced 201 million kg worth over US$900 million.

By the ninth day of the current marketing season, farmers had offloaded 10,8 million kg worth US$26 million compared to 7,6 million kg that were bought for US$18 million over the same period a year earlier.

TIMB registered 86 456 farmers for the 2017 marketing season from 80 000 a year ago as the hectarage under production improved to 107 035 from 95 160.

The Zimbabwe Farmers’ Union said, “With better rains that graced us this year, the golden leaf is likely to improve further from last year’s total output.

“So far prices are fair but we anticipate that average prices will continue to improve from the current prices of US$2,53 per kg so that at the end of the day a farmer can get something from the investment he or she has put in.”

Tobacco is one of the country’s major foreign currency earners and the RBZ is offering a 5 percent bonus scheme for farmers who grow the leaf for outside markets.

Last year, over 66 000 tobacco farmers received US$29 million from the facility.

For the 2017 marketing season, the TIMB has licensed three auction floors — Boka Tobacco Floors, Premier Tobacco, and Tobacco Sales Floor — and over 20 contract buyers.

Source :

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