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Agriculture Reporter

TOBACCO farmers had by Day 121 of the 2022 tobacco marketing season earned US$637 million from the sale of 208 million kilogrammes of the golden leaf marking a percentage difference of 8, 17 percent from the US$589 million they pocketed during the corresponding period last season after disposing 211 million kilogrammes of tobacco.

Auction floors accounted for 13 million kilogrammes of the total sales, which generated US$40m while their contract counterparts sold 196 million kilogrammes worth US$597m, just some thousands shy of besting the entire 2021 season’s earnings. The average price was US$3, 20 per kilogramme at the auction floors while contract floors recorded US$3, 05 per kilogramme.

The highest price was US$6, 80 recorded at the contract floors with the auction floors scoring US$4, 99 per kilogramme. The lowest price at both floors was US$0, 10 per kilogramme.

The 2022 tobacco prices were firmer than 2021’s due to better quality leaves despite the difficult weather conditions experienced during the season. Prices also remained firm during the course of the season, averaging above US$3 per kilogramme compared to an average of US$2, 80 dollars per kilogramme last year.

Tobacco remains a key crop for the Zimbabwean economy, contributing exports of more than US$1, 2 billion, a figure that excludes the indirect economic activities that are associated with providing services related to production, logistics, marketing and exporting the crop.

This marketing season farmers were getting 75 percent of their sales proceeds in foreign currency, up from 60 percent last year with the remainder coming in local currency.

On the one hand, the Government is spearheading the Tobacco Value Chain Transformation Plan that aims at transforming Zimbabwe’s tobacco value chain into a US$5 billion industry by 2025. The plan, which was availed last year, focuses on increasing primary production to 300 million kilogrammes by 2025, localising financing for small-scale producers and increasing value addition from 2 percent of total tobacco produced to more than 30 percent.

Tobacco is Zimbabwe’s second foreign currency earner after gold, with China and South Africa being the major buyers of the golden leaf. Last year, the country sold 211 million kilogrammes of tobacco leaves.

The bulk of the crop is now being produced and sold under contract arrangements while only 5 percent of farmers are self-funded or are able to borrow from banks.