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Obert Chifamba
FORTUNE seems to be favouring tobacco farmers!

After Government reviewed their foreign currency retention percentage from 60 percent last season to the current 75 percent, this season’s leaf, though less in volume than last year’s, seems to be commanding a better quality and better earnings too.

Latest statistics to be released by the Tobacco Industry and Marketing Board (TIMB) have since indicated that the farmers had by Day 63 (June 30, 2022) of the 2022 tobacco marketing season pocketed a whooping US$505 million from the sale of 167 million kilogrammes of the golden leaf.

This marks a change of 0,22 percent from the 2021 marketing season during which they had sold 183 million kilogrammes, but earned US$504 million in the process, which is lower than what they have already netted this year yet the volumes traded so far are less than last season’s.

The average price for this year is US$3,02 while that of last season was US$2,76 per kilogramme marking a percentage change of 9,60.

Contract floors have so far sold 156 million kilogrammes of tobacco generating US$470 million while their auction counterparts also sold 11 million kilogrammes with a value of US$35m.

The highest price at both auction and contract floors has so far been US$6,80 while the lowest has also been US$0,10. Last season the highest price was US$6,70 with the lowest sitting at US$0,10 just like this season.

The bulk of the country’s crop is sold through contracts since 95 percent of the crop is grown under a contract system while only 5 percent of farmers are self-funded or are able to borrow from banks.

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

In acknowledgement of the crop’s strategic importance to the economy, the Government is spearheading the Tobacco Value Chain Transformation Plan that aims to transform the country’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 kg by 2025, localising financing for small-scale producers, and increasing value addition from two 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.