TVCT shows efficacy as tobacco export earnings surge 26pc Tobacco exports 2010-2022: ZimStats

Edgar Vhera Agriculture Specialist Writer

THE country has recorded a 26 percent surge in export earnings from tobacco products from US$477 million in the period January to August in 2022 to US$603 million in the comparable period this year following the operationalisation of the Tobacco Value Chain Transformation Plan (TVCT).

Statistics from Zimbabwe National Statistics Agency (ZimStat) show that for the period January to August 2022 earnings from tobacco product exports were US$476 980 677 compared to US$603 272 665 over the comparable period this year.

Zimbabwe exports partly or whole stemmed/stripped tobacco or not stemmed/stripped tobacco. It also exports tobacco refuse, cigars, cheroots and cigarillos containing tobacco, cigarettes and manufactured tobacco.

In volume terms it rose 13 percent from 103 793 961 to 117 594 187 kilogrammes. The average price increased 12 percent from US$4, 60 to US$5, 13 per kilogramme.

The combined influence of increased volume and rise in price catapulted the increase in earnings.

The country exported 71 percent of its product as tobacco partly or wholly stemmed/stripped with tobacco refuse coming on second with 19 percent. This was the same trend last year.

Analysis of average prices received for the different product classes show that cigars, cheroots and cigarillos containing tobacco had the highest of US$123 per kilogramme followed by tobacco which was partly or wholly stemmed/stripped at US$6,36.

Cigarettes containing tobacco came third at US$5,48 per kilogramme while there were no exports of manufactured tobacco, extracts and essence.

Commenting on the increase, Zimbabwe Tobacco Association (ZTA) chief executive officer Mr Rodney Ambrose said the increase was attributed to the rise in shipments to the Far East.

“There has been a significant increase in shipments to the Far East, as shipping constraints have eased. Also, a higher value crop has been exported to select destinations. Unfortunately, the same growth cannot be said of growers’ earnings. The future of the tobacco sector remains positive, provided we can address issues around growers’ viability and sustainability,” Mr Ambrose said.

Zimbabwe Tobacco Growers Association (ZTGA) chairman Mr George Seremwe concurred and said this was positive and very encouraging.

“Credit must be given to farmers who continue to grow the crop even if they are breaking even or making a loss with the hope that one day, they will make a profit. Contractors also should be thanked for rendering support to farmers. However, the Tobacco Industry and Marketing Board (TIMB) must work on reducing or eliminating the participation and licensing of surrogates (middlemen) who are putting huge mark ups on their services to the detriment of farmers,” Mr Seremwe said.

Mr Seremwe said profitability of farmers can only be enhanced is the all stakeholders work on reducing the cost of production with TIMB enforcing contract pricing, monitoring delivery of adequate inputs to farmers on time.

He said some contractors were charging very high prices for coal with the final price being three to four times the price of the commodity from market source.

The Government and tobacco stakeholders in August 2021 came up with the TVCTP with a goal of achieving a US$5 billion industry by 2025 chiefly from increased production, value addition and beneficiation from the current two to 30 percent.

Essentially, the country’s exports of tobacco products have been on an upward trend earning US$795 million in 2020, followed by US$837 million in 2021 and US$998 million last year. This year’s earnings are expected to be above US$1 billion by year end.

The 2023 tobacco marketing season saw the country producing a record 296 million kilogrammes of flue-cured tobacco by day 119 of trade, earning farmers US$897 million.

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