Farmers pocket US$500m, as 168 million kilogrammes tobacco traded

Agriculture Reporter

TOBACCO farmers’ earnings continue on an uphill trajectory with Day 40 of the 2023 marketing season indicating that they have so far pocketed US$500 million from the sale of 168 million kilogrammes of the golden leaf by Day 40.

Essentially, the farmers’ current earnings and delivered volumes of the golden leaf are successfully dwarfing the performance recorded during the corresponding period last year when the farmers had sold 116 million kilogrammes of tobacco that left them US$348 million rich. This marks a 44 percent change with the average price for this year is sitting at US$3 per kilogramme versus US$2, 99 for last season. This represents a slight change of 0, 51 percent.

As has become the tradition, contract floors have done more business – selling 153 million kilogrammes of the flue-cured tobacco worth US$461m as opposed to 14 million kilogrammes of tobacco worth US$39m that have been traded at the auction floors.

The highest price recorded so far at both floors is US$6, 20 per kilogramme that was scored at the contract floors while the lowest has not changed from last season’s US$0, 10 per kilogramme at both floors as well. Last season’s highest price was US$6, 80 per kilogramme and was scored at the contract floors.

This season, farmers will retain 85 percent of their earnings in hard currency up from last year’s 75 percent. The rest of the earnings will be in local currency pegged at the prevailing interbank exchange rate. The    decision to award farmers 85 percent of their foreign currency earnings was made effective starting February 6, this year.

Tobacco deliveries are projected to rise to 230 million kilogrammes this year, up from last season’s 212 million kilogrammes. This year, farmers have planted 112 293ha of tobacco down from last season’s 116 454ha while the area under the irrigated crop increased by 2 percent from 17 867ha last year to 18 237ha this year. Production on dry land also rose 4 percent from 94 426ha to 98 273ha this time around.

Tobacco is the country’s second largest foreign currency earner after gold.

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