Tobacco output surpasses 2023 target With production exceeding the 2023 target, auction sales, which had been declining in the past few years, have seen more than double growth this year. (File Picture)

Business Reporter

ZIMBABWE’S tobacco output has surpassed the target for 2023, after farmers delivered 231,5 million kilogrammes of the “golden leaf”, according to official statistics.

This year’s targeted production was 230 million kg, but with more deliveries still trickling in, especially from large-scale farmers, output could be a “little bit higher” than the initial forecast, according to some industry players.

By Tuesday this week, deliveries had reached about 231,5 million kg, up 56 percent from last year’s total, according to statistics from the Tobacco Industry and Marketing Board (TIMB).

Of note is a huge jump in the volumes sold through the auction system, which registered an increase of nearly 80 percent from last season.

“We are close to (the) end of the season, but we are expecting more deliveries, especially from large-scale.

However, we are not yet sure if we will get to 253 million, the highest output registered by the country…(ever),” said an executive with a leading tobacco merchant.

The total value of the tobacco sold this year is US$696,7 million up from US$445,4 million last year, at the same stage of the marketing season, averaging US$3,01 per kilogramme.

Tobacco is the country’s largest foreign currency earner and is largely grown by small-scale farmers. Most of the tobacco is exported to China, United Arab Emirates, South Africa, Belgium, Egypt, and Indonesia.

At its peak, the country produced 253 million kg, three seasons ago. Under the Tobacco Value Chain Transformation strategy, the country seeks to increase tobacco output to 300 million kg by 2025, enhance value addition and beneficiation to around 30 percent through the production of cigarettes and grow the industry to US$5 billion by 2025.

According to industry players, a combination of better prices and the decentralization of the contract floors are among the reasons that led to a massive jump in deliveries

Auction rebounds

In a recent interview, the TIMB acting chief executive Mr Emmanuel Matsvaire said the growth in auction volumes was a positive sign that the auction system could be sustained.

Over the past few years, the auction system, which determines minimum grade prices for contract sales, has been falling with only 3 percent of the crop sold through the system last year.

Some industry players raised concerns over the potential collapse of the auction system, saying the dominance of contractors in the marketing of the “golden leaf” could see price manipulation in favor of the merchants, which would, in turn, frustrate tobacco farmers from growing this key commodity.

Zimbabwe’s tobacco auction system used to be the marketing model of tobacco in the world, but “free” tobacco volumes have been shrinking as farmers, mostly smallholders, joined contract schemes because they lack collateral to obtain loans from the banks.

Prior to 2004, tobacco marketing was done exclusively through an auction system whereby producers mobilised the necessary cropping resources on their own and took their crop to an auction floor of their choice. However, in 2004, this system was changed after the introduction of the contract growing of tobacco.

Under the contract system, licensed tobacco buyers provide the inputs to the farmers, with the contractor—or the off-taker–guaranteeing to buy the tobacco contracted at prices (per grade) equal to or higher than those prevailing on the auction floors.

While Zimbabwe used to pride itself on a vibrant auction marketing system, the viability of tobacco farmers has, however, been seriously eroded as a result of the introduction of the dual marketing system now dominated by contract floors.


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